China Huaren Organic Products, Inc. – ‘10KSB’ for 12/31/99

On:  Monday, 4/24/00, at 7:02pm ET   ·   As of:  4/25/00   ·   For:  12/31/99   ·   Accession #:  931947-0-13   ·   File #:  0-25380

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       46±   216K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      5K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

            SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.   20549
                                           FORM 10-KSB

                           Annual Report Pursuant to
                          Section 13 or 15(d) of
         the Securities Exchange Act of 1934

( X ) Annual Report Pursuant to Section 13 or 15(d) of the Securities           
Exchange Act of 1934 for the fiscal year ended December 31, 1999  

(   ) Transition Report Pursuant to Section 13 or 15(d) of the Securities       
Exchange Act of 1934 for the transition period from _____ to _____

                         Commission File Number:   0-25380

                         ULTRADATA SYSTEMS, INCORPORATED
        (Name of small business issuer in its charter)

Delaware                              43-1401158          
(State or other jurisdiction of        (IRS Employer Identification No.)        
incorporation or organization)                                              

        9375 Dielman Industrial Drive, St. Louis, MO.    63132
          (Address of principal executive office)       (Zip code)

Issuer's telephone number, including area code: (314) 997-2250    

Securities registered pursuant to Section 12(b) of the Act: None  

Securities registered pursuant to Section 12(g) of the Act:     

Common Stock, $.01 Par Value      
                        (Title of Class)

Check whether the Issuer (1) has filed all reports required to be filed by      
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for       
such shorter period that the Registrant was required to file such reports)      
and (2) has been subject to such filing requirements for the past 90 days.      
Yes  X    No                                                    
----                                                      
Check if there is no disclosure of delinquent filers in response to Item 405    
of Regulation S-B contained in this form, and no disclosure will be contained,  
to the best of registrant's knowledge, in definitive proxy or information       
statements incorporated by reference in Part III of this Form 10-KSB or any     
amendment to the Form 10-KSB.                                                   

State the issuer's revenues for its most recent fiscal year:   $5,566,626       

The aggregate market value at April 12, 2000 of the voting stock held by non-   
affiliates, based on the closing price as reported by NASDAQ National Market    
System (NMS), was approximately $13,249,734.  The aggregate market value has    
been computed by reference to a share price of $5.125  (The price at which      
stock was sold, or the average bid or asked price of such stock on April 12,    
2000).  All directors and more than five percent of stockholders of the         
Registrant have been deemed "affiliates" for the purpose of calculating such    
aggregate market value.                                                         

The number of shares outstanding of the issuer's common stock, as of April      
12, 2000, was 3,176,322.                                                        

Transitional Small Business Disclosure Format:    Yes    No   X                 
                                                                            ----
DOCUMENTS INCORPORATED BY REFERENCE:   None                                     

FORWARD-LOOKING STATEMENTS: NO ASSURANCES INTENDED                              

This Item (1) contains certain forward-looking statements regarding the         
Company, its business prospects and results of operations that are subject to   
certain risks and uncertainties posed by many factors and events that could     
cause the Company's actual business, prospects and results of operations to     
differ materially from those that may be anticipated by such forward-looking    
statements. A major risk inherent in the implementation of the Company's        
revised business plan, referred to herein is executing the plan within the      
constraint of financial resources available to the Company at this time.        
Factors that may affect such forward-looking results include statements about   
backlog, the Company's ability to successfully develop new products for new     
markets, customer acceptance of new products, the possibility of the Company    
losing a large customer or key personnel, the Company's ability to manage       
growth and to successfully integrate recent strategic marketing and product     
development alliances, the impact of competition on the Company's revenues,     
delays in the Company's introduction of new products, and the possibility of    
the Company failing to keep pace with emerging technologies.                    

Accordingly, no assurances can be given that events or results mentioned in any 
such forward-looking statements will in fact occur.  When used in this          
discussion, words such as "believes" and phrases such as "are expected" and     
similar expressions are intended to identify forward-looking statements, but    
are not the exclusive means of identifying forward-looking statements.  Readers 
are cautioned not to place undue reliance on these forward-looking statements,  
which speak only as of the date of this report.  The Company undertakes no      
obligation to revise any forward-looking statements in order to reflect events  
or circumstances that may subsequently arise.  Readers are urged to carefully   
review and consider the various disclosures made by the Company in this report  
and in the Company's reports filed with the Securities and Exchange Commission. 

The analysis of the Company's financial condition, capital resources and        
operating results should be viewed in conjunction with the accompanying         
financial statements, including the notes thereto.                              

PART I                                                                          

Item 1. BUSINESS                                                                

GENERAL DEVELOPMENT OF BUSINESS                                                 

Ultradata Systems, Incorporated ("The Company") is engaged in the manufacture   
and marketing of hand-held data retrieval devices that employ proprietary data  
compression technology developed by the Company. The Company was formed, as a   
corporation in 1986, named Laser Data Technologies, Inc. The name was changed,  
in November 1994, to Ultradata Systems, Inc., to better reflect the Company's   
business orientation.                                                           

The Company's primary focus has been in research, development, and marketing of 
electronic consumer travel products which utilize the Company's proprietary     
database and patented data compression technology for storing large quantities  
of information on, and retrieving it rapidly from, a microprocessor memory chip.

The Company is in the process of expanding into the wireless/Internet           
e-commerce market through its new products, new partners, and its invest-       
ments.  The Company has significant intellectual property in databases,         
software, and patents that can be applied in innovative systems involving the   
Internet and wireless applications.  It has invested in Influence Data, LLC, as 
a one-third owner with the objective that its web portal, DriveThere.com,       
become a new kind of motor club for the new economy.  DriveThere.com plans on   
utilizing the Company's proprietary databases for innovative wireless           
applications involving partnerships with major communications companies.  The   
Company also is completing development of an advanced portable auto navigation  
product, a version of TRAVEL*STAR 24, that can connect through wireless         
channels to the Internet to offer unique services.  The Company's 25%           
ownership in Talon Research and Development Company, LTD, of New Zealand        
allows the Company to provide the TRAVEL*STAR 24 at an attractive price.  The   
Company also benefits from Talon's rapid growth in supplying GPS (Global        
Positioning Satellite) receivers in OEM applications to the US and              
international markets.                                                          

Each of the Company's consumer products is designed to allow the consumer to    
access useful information stored in a convenient manner.  The Company's         
products generally sell at retail prices between $19.95 and $49.95 per unit.    
The new TRAVEL*STAR 24, an auto after-market portable navigation system using   
our databases, will be introduced later in 2000.  It provides voice turn-by-    
turn directions to services (gas stations, restaurants, etc.) and locations     
across the country, including 12,000 towns and over 200,000 services.  This     
unit should be available at retail for less than $400, which should make it     
very competitive in the auto aftermarket.  The fact that it is very portable    
and requires no elaborate installation offer advantages over the more           
expensive in-car systems.                                                       

CONSUMER PRODUCTS                                                               

The Company's Consumer Products Division primarily develops and markets hand-   
held travel computers, the majority of which bear the ROAD WHIZ registered      
trademark. Various models contain custom developed data to provide the traveler 
with directions and information regarding the services available along the U.S. 
Interstate Highway System.  Some versions include city information as well.     
The travel database contained in most of the models offered by the Company is   
proprietary and contained on a memory chip built into each unit.  The travel    
database contains over 100,000 services. This service information includes      
destination, mileage, gas stations, hotels, motels, hospitals, 24-hour          
restaurants, and highway patrol emergency numbers along the United States       
Interstate Highway System. During 1998, the Company entered into an agreement   
with the American Automobile Association (AAA) to develop an expanded database  
to include restaurants, lodging facilities, camping and service facilities      
approved by AAA. This database containing in excess of 100,000 facilities, and, 
where available, their AAA rating or AAA approved status, has been incorporated 
in a hand-held travel computer called the TripWizard. This unit is currently    
being offered to AAA members. The Company's agreement with the AAA represents   
an important commitment to private label products. TripWizard is being marketed 
to AAA's affiliates, consisting of 93 clubs, 1,100 offices and over 41 million  
members in the United States, as well as to specialty retailers.  The Company   
is expecting to introduce its TRAVEL*STAR 24 portable navigation system into    
the auto after-market later in 2000, as well as Internet-related products.      

MAJOR PRODUCT OFFERINGS                                                         

The hand-held travel computers made by the Company provide routing and services 
similar to other travel software products in the market.  The Company's         
database containing in excess of 100,000 services, is proprietary to the        
Company's travel computers. The Company sells its products through independent  
sales representatives, mass merchandise retailers, catalog companies,           
department stores, office supply stores, direct mail promotions, luggage stores 
and selected television shopping channels.                                      

ROAD WHIZ FAMILY                                                                

The ROAD WHIZ hand-held travel computer was introduced during 1990. Since 1990, 
the Company has developed enhanced travel computer versions, based on a basic   
design the of the original ROAD WHIZ(, including ROAD WHIZ PLUS(, ROAD WHIZ     
ULTRA, RV SPECIAL, ROAD WHIZ COMPANION, SUPER ROAD WHIZ, AAA TripWizard,        
ULTRAFINDER, KIDS ROAD WHIZ, GOLF GUIDE, GOLF FINDER, HOME AND GARDEN, GARDEN   
GURU, ROAD MATE/PATHFINDER 2000, and CAR AND DRIVER. The strategy for the ROAD  
WHIZ family of products is to expand its line of travel computers to include    
additional features and functions at low retail prices and to further           
penetrate the mass market.                                                      

ROAD WHIZ PLUS                                                                  

ROAD WHIZ PLUS was introduced in 1991, and has been enhanced each year. It      
provides complete routing information for over 90 cities giving driving         
distances, driving time and detailed directions to major cities. ROAD WHIZ      
PLUS contains over 60,000 services and has double the memory capacity of first  
generation travel computers.  This unit is marketed in mass merchandise         
retailers, such as Kmart.                                                       

SUPER ROAD WHIZ                                                                 

The SUPER ROAD WHIZ was introduced during 1997.  It lists interstate highway    
services including gas stations, restaurants, motels, campgrounds, malls,       
tourist sites, and hospitals in over 160 major cities. During 1998, SUPER ROAD  
WHIZ was featured on the QVC television network selling over 90,000 units in    
one day as the "Today's Special Value" promotion.  It is now in retail          
distribution through such companies as Kohl's.                                  

ULTRA ROAD WHIZ                                                                 

The ULTRA ROAD WHIZ was introduced exclusively by QVC in December 1999.  It has 
many new features and more memory than the SUPER ROAD WHIZ.  Over 70,000 units  
were sold on introduction in one day as "Today's Special Value".                

ULTRAFINDER                                                                     

ULTRAFINDER was introduced in 1995.  It is the most powerful hand-held travel   
unit currently marketed by the Company. It contains over 60,000 city and        
highway services and specific routes to over 250 cities, giving distance and    
driving time.  ULTRAFINDER features a two-line display and an updatable plug-in 
memory module.  It is generally distributed through third party catalogs, such  
as SkyMall magazine.                                                            

AUTO PILOT                                                                      

Auto Pilot is a ROAD WHIZ type unit which utilizes the Company's proprietary    
technology and designs. It is manufactured and marketed by Idea Village, a      
company engaged in media television marketing. Idea Village employ a broad      
range of television advertising, including spot ads and an infomercial to       
generate product awareness and mail order sales, before presenting the product  
in mass merchandise retail, drug and other retail outlets.                      

TRAVEL*STAR 24                                                                  

The Company has invested heavily in developing a portable true-GPS driver       
navigation system for the 12-volt auto after market.  The system is designed to 
perform route calculations in real time and present voice output to alert       
drivers when and where to turn to follow their route or to access services      
along their route. The Company has demonstrated a prototype called TRAVEL*STAR  
24 that includes turn-by-turn directions and information for more than 200,000  
highway and city services, sites of interest in each of more than 250           
metropolitan areas and turn-by-turn directions to over 12,000 smaller cities    
and towns. The unit continually displays heading and distance to the desired    
destination. Voice output identifies turns and alerts the driver to deviations  
from the calculated route. This item was introduced to the market at the        
Consumer Electronics Show held in Las Vegas, Nevada in 2000.  Management        
believes that variations of the TRAVEL*STAR 24 product are feasible by          
including wireless capability for connection to the Internet.                   

DISCONTINUED PRODUCTS                                                           

The KIDS ROAD WHIZ, GOLF FINDER, GOLF GUIDE, HOME & GARDEN, and GARDEN GURU     
were discontinued in 1999 due to insufficient sales.  As a result of limited    
market acceptance, the Company offered these products to a third party in       
exchange for an advertising barter arrangement.                                 

LASER SYSTEM CONTRACTS                                                          

The business of the Company at inception was primarily focused on the           
fulfillment of research and development contracts leading to the manufacture of 
laser communications systems. In 1995, the Company received a $1.7 million      
government production contract from the Yuma Proving Ground to manufacture      
their Laser Pointing and Tracking System PATS design.  The contract was         
essentially completed in 1998, but some small residual effort occurred in 1999  
with little effect on the financial performance of the Company.                 

MANUFACTURING                                                                   

The Company does not manufacture any of its consumer products and is entirely   
dependent upon third parties to manufacture and assemble the components         
comprising its products. The Company has assemblers who manufacture the         
products, with the Company procuring the microprocessors and memory chips and   
other unique items and supplying them to the company performing assembly.  The  
Company generally receives annual pricing from each of its manufacturers based  
upon estimated annual quantities. Thereafter, the Company releases individual   
purchase orders for production. The Company's arrangements with each            
manufacturer are terminable at will by either party.  If either or both         
arrangements were to be terminated, the Company believes that alternate sources 
would become readily available.  The sudden loss of one of the manufacturers or 
unanticipated interruptions or delays from present manufacturers would likely   
result in a temporary interruption to the Company's planned operations.  The    
Company intends to maintain its practice of engaging subcontractors to meet its 
future manufacturing requirements.                                              

BACKLOG                                                                         

As of December 31, 1999, the Company's total backlog was approximately $46,400, 
versus a backlog of approximately $15,300 on December 31, 1998. Backlog is      
generally very low at December 31, due to minimal post holiday demand and       
normally short retailer lead times for standard products, which can be shipped  
from inventory.  Similar to others who have retail customers, the Company has   
experienced higher demand in the fourth quarter relative to other quarters.     
The Company has occasionally experienced cancellations or postponements in its  
delivery of orders.                                                             

SALES AND MARKETING                                                             

The Company's sales and marketing strategy is to remain the leading supplier    
of low-cost, portable travel computers and to expand into portable travel-      
related products capable of connection to the Internet.  To support this        
strategy, the Company believes it must offer a growing line of standard,        
private label, and GPS-based travel computers.  Such new devices are            
principally aimed at providing portability, increased consumer safety and       
security, more features and functionality, at affordable prices compared to     
travel information devices available from other sources.                        

The Company identifies its prospective customers and markets through a          
combination of direct mail, telemarketing, media advertising, tradeshow         
participation, and periodic appearances on home shopping television channels.   
The Company advertises periodically in magazines, travel oriented journals      
and periodically distributes promotional materials to increase market awareness 
of its products.  Since going public in early 1995, the Company has focused its 
primary marketing efforts on establishing customer relationships with local and 
regional retailers and upscale retail outlets.                                  

The Company's products are also marketed through independent sales              
representatives, mail order catalogs and office supply stores.  In fiscal 1999, 
the Company incurred $1,446,225 in advertising, promotion, and marketing        
program expenses, as compared to $2,416,886 in 1998.  During 1999, the          
Company abandoned its expensive direct mail and advertising programs that       
comprised the primary thrust of its direct sales efforts.  These programs had a 
negative effect on profitability during 1998 and the first quarter of 1999.     
Instead we began in 1999 employing joint advertising strategies with            
prospective mass-market customers. During 1999, the Company incurred $157,700   
advertising allowances for a Road Whiz promotion at over 3,000 Kmart stores.    
These expenses were computed in proportion to the number of units sold through  
to their customers.                                                             

The Company continues to expand its mass-market distribution and expects to add 
new large retail chains in 2000 to Kmart, Target, and others brought on in      
1999, due to demonstrated success in this venue.                                

DEPENDENCE ON CUSTOMERS                                                         

Dependence on individual customers has been reduced in comparison to 1998 as    
our mass-merchandiser customer base expands. Four customers accounted for 10%   
or more of our sales in 1999, and, in the aggregate, accounted for 55% of       
sales.  The loss of our largest customer would have resulted in a loss of       
sales of approximately 20%.  The customers to whom over 10% of sales were       
made in either of the past two years are identified in the following table.     

Customer                   1999      % of Sales      1998       % of Sales      
----------------------------------------------------------------------------    
QVC                     $1,102,246     19.8%      $1,379,148       19.7%        
Kmart                      813,792     14.6%               -          -         
United Marketing Group     582,260     10.5%               -          -         
Kohl's                     575,184     10.3%               -          -         
Roy Thomas Inc.                  -        -        1,508,634       21.6%        
                                 -----------------------------------------------
               TOTAL          $3,073,482     55.2%      $2,887,782       41.3%
                                ================================================

COMPETITION                                                                     

Competition in the consumer electronics industry is intense. Ultradata has      
established a niche in this market in terms of unique product functionality     
and perceived value to the consumer. The size of the market is not a limiting   
factor in the opinion of management, since our products can have appeal to most 
traveling consumers. Nonetheless, Ultradata has established and maintained a    
position in this market for several reasons:                                    

* Our patented data compression technology permits the storage of unusually     
large volumes of information in very-low-cost devices.                      
* Our database is unique and would be difficult and time-consuming to duplicate.
* We have a developed insight into the needs and idiosyncrasies of the          
traveling consumer and can translate that into specifically useful data     
content and a user-friendly interface.                                      
* We have a very simple, low-cost design for the product, which employs a       
minimum of parts.                                                           
* We have developed very low-cost but high quality manufacturing sources.       
* Those devices that could be considered to be competitive, in terms of         
function, are much more expensive, and generally don't have the data quality
we offer.                                                                   

These considerations constitute barriers to entry by would-be competitors. None-
theless, determined potential competitors, most of who have substantially       
greater resources available to them, might decide to launch a competing         
product, or to employ some emerging technology to try to compete on a price     
basis. To this date, we know of no one who has done so.  We will continue to    
focus on providing the most utility for the lowest cost, with the simplest      
user interface - tailored to the real needs of the traveling consumer.          

This approach will be especially visible in the new TRAVEL*STAR 24 product,     
which offers most of the performance features of competing $2000 systems such   
as NeverLost and Visteon, at a retail price target under $400.  For this        
product, our competition includes a number of GPS-based products that employ    
"moving-map" displays. Only the high-end products in this group offer features  
similar to the TRAVEL*STAR 24. At the low end, there is mapping software        
available for use on the home computer which will plan a route and provide      
limited service information - but does not have the flexibility to compute      
routes in the car, nor the en-route navigation capability. The benefits of      
mobility are available to the owners of laptop computers, but we believe this   
would appeal to a different class of consumer and is still a relatively small   
market segment.  To protect the Company's dominant position in affordable       
travel computers, the Company invested $358,357, or approximately 6.4% of       
its 1999 revenues in research and product development, compared to $672,090     
or 9.3% in 1998, noting that much of 1998 expenditures were aimed at GPS        
product development as well. There can be no assurance, however, that the       
Company will be able to develop or acquire new products or increase market      
channels at a rate to maintain the Company's position in its market.  The       
Company also cannot guarantee that its new or updated products will achieve     
market acceptance.                                                              

RELATED PARTIES                                                                 

TALON RESEARCH & DEVELOPMENT COMPANY, LTD.                                      
In March 1998, the Company acquired an 18.9% ownership interest in Talon        
Research & Development Company, Ltd. (Talon) of Auckland, New Zealand for       
$282,500. Talon develops, manufactures and markets electronic components and    
marine instruments including GPS receiver units, including the antennas used    
in the Company's TRAVEL*STAR GPS product line. On August 12, 1998, the Company  
paid $314,162 for an option to acquire an aggregate interest of up to 50.1% of  
the outstanding common stock of Talon for approximately $ 820,000. The option   
was amended during 1999 allowing the Company to apply its option value for an   
additional 6% equity interest in Talon, thereby increasing the Company's        
ownership in Talon to 24.9%.  The Company's 24.9% interest in Talon is          
accounted for using the equity method of accounting and is stated at amortized  
cost plus equity in undistributed earnings since acquisition.                   

For the year ended December 31, 1999, Talon sales grew approximately 33%        
compared with December 31, 1998. Our proportionate share of Talon's net income  
after taxes was reduced to a $9,585 loss as a result of certain U.S. GAAP       
adjustments and the amortization discussed above.  Talon management indicates   
that its backlog as of December 31, 1999 increased 22% compared to the year     
ended December 31, 1998, and that it expects sales to increase during fiscal    
year 2000.  In order to give assistance with Talon's working capital needs,     
the Company provided a twelve-month standby letter of credit maturing March     
31, 2000 to Talon's bank in the amount of $400,000 to secure a new financing    
arrangement.                                                                    

DriveThere.com (INFLUENCE DATA, LLC)                                            
In May 1999, the Company formed a joint venture with Influence Content, LLC,    
a website developer, to form Influence Data, LLC.  The Company issued 80,000    
shares of common stock and options for 160,000 shares of common stock (all      
valued at $327,200) for a one-third interest in Influence Data, LLC.  The       
purpose of the joint venture is to develop a website that will offer a wide     
variety of services for the motorist, including, but not limited to, parking    
ticket settlements, access to regional home newspapers while traveling,         
directions to a desired location, unique products for the traveler, emergency   
road service, plus additional unique applications tied to the Internet.  The    
Company's 33.3% interest in Influence Data, LLC is accounted for using the      
equity method of accounting and is stated at amortized cost plus equity in      
undistributed earnings since acquisition.  The Influence Data website,          
DriveThere.com, became operational in October 1999 and was upgraded in          
February 2000.                                                                  

SCIENTIFIC COMMUNICATION & CONTROLS CORP.                                       
The Company formed a joint development and marketing agreement in July 1998     
with Scientific Communication & Controls Corporation (Sci-Com) of McLean,       
Virginia. Sci-Com acquired the operating rights to the SmartTime Network from   
Intellidata Technologies, Corp. Sci-Com was to complete the implementation of   
network software to support the Company's E@syMail and internet personal data   
assistant products. To facilitate this development and testing of the Company's 
products, the Company transferred all software and documentation of the service 
software acquired from Intellidata, in exchange for a promissory note bearing   
interest at prime rate of $400,000. In addition, the Company leased computer    
equipment acquired from Intellidata to Sci-Com at favorable rates. The Company  
advanced Sci-Com $50,000 in a promissory note, due June 30, 2000 with interest  
at 6.36% to expand equipment capabilities to support the proposed network. The  
agreement also includes a provision for the Company to advance to Sci-Com up    
to an additional $400,000 in additional funds to complete network development,  
of which $200,000 was advanced as of December 31, 1998. These advances were     
incorporated in a promissory note due January 1, 2002, which provides for the   
Company to be entitled to one-half, (50%) of the operating revenue of SmartTime 
Networks (excluding only non-reoccurring engineering services provided by Sci-  
Com). The agreement also provides for the optional conversion of the loan into  
a 10% equity interest in Sci-Com, at the Company's sole discretion.  The        
Company decided it could not afford to invest further in E@syMail in early      
1999.  Management believes that Sci-Com will be able to repay the loans as      
specified in the Agreement.  However, $447,428 has been reserved, leaving a     
remaining receivable of $272,683 at December 31, 1999.                          

RESEARCH AND DEVELOPMENT                                                        

The Company performs ongoing research and development, seeking to improve       
existing products and to develop new products.  These activities are primarily  
conducted at the Company's corporate headquarters, although the Company         
periodically engages outside computer system design consultants to expedite the 
completion of the development and test stages.                                  

In 1999, the Company incurred $358,357 in research and development costs        
compared to $672,090 in 1998. Research activities for 1999 were primarily       
focused on continued development of TRAVEL*STAR 24, the development of a new    
database and product to incorporate American Automobile Association (AAA)       
facility and rating data to support the TripWizard product, and Internet        
Triplink handheld product.  The Triplink will combine the features of an ULTRA  
ROAD WHIZ with the ability to receive downloaded door-to-door directions from   
a PC. These three major projects accounted for 67.2% of all research and        
development expenses in 1999, with the majority of the effort devoted to        
TRAVEL*STAR 24.  In addition, the Company capitalized $110,214, included in     
Property, Plant and Equipment, of development for the software tools required   
to provide the database for the TRAVEL*STAR 24.                                 

DATABASE RESEARCH                                                               

The Company believes that a broad and accurate proprietary database is one of   
the most important factors for the competitive success of the consumer product  
line.  The potential for additional net sales, as well as the need to preserve  
the Company's reputation for accuracy and reliability, requires that the        
Company continuously validate and update its database.  The Company uses        
various means to update its ROAD WHIZ database, including publicly available    
geographic and demographic data.  A significant part of the ROAD WHIZ database  
is gathered and verified by "Road Helpers."   Road Helpers are generally        
retirees and others that travel extensively and are nominally compensated by    
the Company.                                                                    

The Company maintains an on-site full-time staff of researchers who review and  
augment the data gathered by the Road Helpers.  In addition to the Road         
Helpers, the research staff contacts travel services and Chambers of Commerce   
across the country to gather other information.                                 

During the fourth quarter of 1998, the Company reached an agreement with AAA to 
develop a product which combined the Company's expertise in hand held travel    
computers with the extensive database of travel, food and lodging information   
compiled by AAA for the benefit of their members. The Company has combined its  
travel database with that of AAA to provide a new information base for the AAA  
TripWizard. This product is marketed by the 91 auto clubs affiliated with AAA   
to the 41,000,000 AAA members in North America, and through AAA's 1100 local    
offices throughout the United States and Canada.                                

The Company's research and development activities involve seven full-time       
employees, including two software engineers, one hardware design engineer, and  
one technician in addition to the three database research personnel.  During    
1999, the Company employed additional part-time software engineers and computer-
science consultants for development of the TRAVEL*STAR 24 and a number of       
additional contract and part-time personnel for database research.  Over 50     
Road Helpers were used to augment the database research.                        

PATENTS AND TRADEMARKS                                                          

The Company files patent applications, when applicable, to protect its          
technology, inventions and improvements.  The Company owns five patents         
relating to travel products.  The first patent covers its method of             
compressing data relating to travel information.  This compression technology   
permits the Company's travel products to store more data on smaller and less    
expensive memory devices.                                                       

The Company has a second patent dealing with the methodology that enables its   
travel devices to account for changes that occur when the traveler crosses a    
state border. The Company believes that in order to manufacture a similar       
product, a competitor would have to develop a substantially different           
methodology, at considerable time and expense.                                  

It also has a European patent that incorporates the same claims.                

During 1999, the Company received a patent award relating to electronic coupons 
in a handheld travel computer for discounts of services.  The patent claims     
include the handheld units alerting users of the location of coupons in a       
printed coupon book on the traveler's current location, as well as electronic   
coupons in the unit.                                                            

The Company also received in 1999 a patent relating GPS receivers and radar     
detectors, offering unique benefits when the two were combined.                 

In addition to its patents, the Company attempts to further restrict access to  
its proprietary technologies, trade secrets and processes.   Key employees of   
the Company are covered by employment contracts containing restrictive          
covenants.  These covenants require key employees, as a condition of their      
employment, to hold all proprietary information confidential. The Company also  
restricts customers and visitors site access to confidential information.       
There can be no assurance that the Company can be successful in its efforts to  
protect either its patents or its proprietary technologies and processes.       

EMPLOYEES                                                                       

The Company currently has 19 full-time employees, including six officers, all   
of whom are located at the Company's headquarters in St. Louis, Missouri.  The  
Company employs six people in sales, customer service and shipping, three       
people in database research, four people in executive management and            
administration, four people in product development, one person in inventory     
management, and a president and chief executive officer.  None of the           
Company's employees belong to a collective bargaining union.  The Company has   
not experienced a work stoppage and believes that its employee relations are    
good.  In addition, a number of part-time consultants are retained for          
database research and software development.                                     

Item 2. PROPERTIES                                                              

The Company's headquarters and principal administrative offices and research    
and development facilities are located in approximately 12,500 square feet of   
leased office space in an industrial building located at 9375 Dielman           
Industrial Drive, St. Louis, Missouri. The Company pays a monthly rent plus 31% 
of all building expenses under an operating lease which expires October 31,     
2001.  The Company maintains no manufacturing operations on site and employs    
outside contractors to perform all of its manufacturing requirements.           

Aggregate rental expense totaled $114,247 for 1999, compared to $119,236 in     
1998.  The Company believes that its facilities are adequate for the Company's  
present and foreseeable requirements.                                           

Item 3. LEGAL PROCEEDINGS                                                       

There were no material legal proceedings.                                       

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

Not applicable.                                                                 

PART II                                                                         

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS   

(a)     Market Information                                                      
The following table sets forth the prices for the Company's Common Stock        
(NASDAQ: ULTR) as quoted on the NASDAQ National Market for the eight quarters   
starting January 1, 1998 and ending December 31, 1999.                          

                                   Bid
Quarter Ending           High         Low                                       
===========================================                                     
March 31, 1998          $ 6.50      $ 3.75                                      
June 30, 1998           $ 4.50      $ 3.25                                      
September 30, 1998      $ 4.63      $ 2.25                                      
December 31, 1998       $ 3.13      $ 2.00                                      

March 31, 1999          $ 2.75      $ 1.31                                      
June 30, 1999           $ 2.63      $ 0.88                                      
September 30, 1999      $ 2.44      $ 1.00                                      
December 31, 1999       $ 2.06      $ 0.94                                      

At March 28, 2000, the Company's common stock closed at $6.938 on the NASDAQ.   

(b)     Shareholders                                                            
At March 28, 2000, there were 139 registered stockholders of record of the      
Company's Common Stock.  Based upon information from nominee holders, the       
Company believes the number of owners of its Common Stock exceeds 1,200.        

(c)    Dividends                                                                
The Company has never paid or declared any cash dividends on its Common Stock   
and does not foresee doing so in the foreseeable future.  The Company's line    
of credit agreement precludes the payment of dividends.  The Company intends    
to retain any future earnings for the operation and expansion of the business.  
Any decision as to future payment of dividends will depend on the available     
earnings, the capital requirements of the Company, its general financial        
condition and other factors deemed pertinent by the Board of Directors.         

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND       
FINANCIAL CONDITION                                             

OVERVIEW                                                                        

The Company's net sales are derived primarily from consumer products, marketed  
through retailers, catalog companies, and direct mail or other marketing        
agencies or groups as employed by the Company.  The Company's laser systems     
contracts have been completed.                                                  

The following table summarizes the contributions of consumer products and       
development contracts, respectively, to total net sales of the Company for each 
of the last two years ended December 31, 1999.  The table should be read in     
conjunction with the financial statements and the related notes presented       
elsewhere in this Form 10-KSB.                                                  

                                                                       Net Sales
                For the Two Years Ended December 31,
                                                            (in Thousands)
                                             1999       %         1998       %

Consumer Products             $5,567    100.0     $6,984    96.5                
Laser System Contracts             -        -        250     3.5                
                                             -----------------------------------
                                              $5,567    100.0     $7,234   100.0
                                              ==================================

Year Ended December 31, 1999 vs. Year Ended December 31, 1998                   

Consumer product sales for 1999 decreased by $1,417,178 (20.3%) to $5,566,626.  
The decrease was primarily the result of eliminating direct market channels     
that were unprofitable.  In addition, delays in new products resulted in        
missed sales opportunities.  The Company changed its business strategy in late  
1998 to work more closely with strategic partners having greater resources and  
brand equity.  These relationships have been of some benefit to the Company     
albeit still below expectations during 1999.  The Company reduced its workforce 
and facilities expenses to help offset lower net sales.                         

The Company reduced its manufacturing costs by approximately 35.0% with a new   
offshore manufacturer with chip-on-board capability.  The reduced manufacturing 
costs were reflected in sales beginning late in the third quarter, resulting in 
significant operating profit in the fourth quarter 1999.                        

Overall gross profit totaled $2,415,580, or 43.4% of net sales for the year     
ended December 31, 1999, compared to $3,061,874, or 42.3% for 1998.  Totals     
included the effect of expenses for government contract activities being phased 
out.  Gross profit for the consumer product group exclusive of contract         
activities totaled $2,445,685, or 43.9% of sales, for the year ended December   
31, 1999, compared to $3,081,895, or 44.1% for 1998.  Gross profit was affected 
by low-margin sales of obsolete inventory in the third quarter and the          
compensating effect of lower product cost in the fourth quarter.                

Selling expenses for 1999 decreased to $1,812,524 from $2,931,150 in 1998.  The 
decrease of $1,118,626, or 38.2%, was due primarily to a reduction in           
advertising and marketing expenses by $970,661, as the Company curtailed a      
number of expensive marketing programs, including credit card and other direct  
mail activities.                                                                

General and administrative expenses decreased by $755,186 (26.8%) in 1999 to    
$2,063,015 from $2,818,201 in 1998.  The decrease reflects the efficiencies     
introduced throughout 1999 by staff reductions, executive salary cuts, and      
other cost-cutting measures in response to the revenue reductions experienced   
in 1998.  In addition, in 1998 the Company established a reserve of $400,000    
against a note due from an affiliate, SciCom, Inc.                              

In 1999, the Company reduced research and development costs by $313,733, or     
46.7%, to $358,357 compared to $672,090 in 1998 as another element in cost      
reduction.  Management believes the rate of research and development            
expenditure has been reduced sufficiently and expects to continue at the        
present rate through 2000.  The capitalization of $110,214 of costs for the     
internally developed software tools necessary for TRAVEL*STAR 24 permits        
amortizing the investment over 5 years subsequent to product introduction.      

During the year the Company established a strategic presence in e-commerce by   
forming a joint venture company called Influence Data, LLC.  The joint venture  
launched its road travel portal website DriveThere.com on October 29, 1999. The 
portal will offer a complete bundle of road travel products, services,          
insurance, and license and vehicle information.  DriveThere.com has been        
actively upgrading its website, and major improvements were completed in        
February 2000.                                                                  

The Company's investment in Talon Research and Development Company, Ltd.        
("Talon") was increased by 6.0% to 24.9%.  Talon achieved record sales in their 
fiscal year.  Talon has been growing rapidly, and its management expects a      
continuation of this trend.  Both of its basic business areas, marine           
electronics and GPS-based products, are growing.  Talon is the main provider    
of GPS receiver hardware to a major US company selling GPS equipment for the    
Palm Pilot.  Talon expanded its marketing internationally in 1999 into South    
Africa and South America and has significant presence in Europe in marine       
electronics under its own brand name, NAVMAN.                                   

The Company also realized royalty income of $127,473 from IdeaVillage due to    
their manufacture and sale through Radio Shack of over 90,000 Auto Pilot        
products similar to the ROAD WHIZ.  Total other income amounted to $191,302 for 
1999, as compared to other income of $303,750 for the year ended December 31,   
1998.  The decrease is primarily due to the loss in equity in affiliated        
companies.                                                                      

As a result of the foregoing, the Company reported a loss before taxes of       
$1,627,014 for 1999, compared to $3,055,817 in 1998.  The Company has fully     
reserved its deferred tax asset in view of its continuing losses in 1999.       
However, efforts in 1999 led to a profitable fourth quarter, indicating         
positive results in its effort to turn the Company to profitability.            

The Company reported a net loss of $1,997,250, or $0.64 per share computed on   
a basic and diluted method, as compared to net loss of $2,330,793, or $0.71 per 
share, computed on both basic and diluted for the prior year.  The weighted     
average shares outstanding at December 31, 1999 were 3,122,138 and at December  
31, 1998 were 3,299,636.                                                        

YEAR 2000 ISSUES                                                                

The Company implemented plans to address Year 2000 issues and did not           
experience any Y2K problems at year's end.  The primary focus of its            
initiative to prepare for Y2K during 1999 included a complete review of the     
Company's information technology systems, other support systems, and the        
readiness of Company suppliers and customers.  Expenses related to              
determination of Year 2000 compliance have been expensed as incurred and have   
not been material to the financial results of the Company.                      

LIQUIDITY AND CAPITAL RESOURCES                                                 

Total cash and cash equivalents decreased by $33,957 from $1,254,091 at         
December 31, 1998 to $1,220,134 at December 31, 1999.  The reduction includes   
$400,000 placed in a restricted cash account to secure the Talon line of        
credit.  The $400,000 is included within the restricted cash of $410,888 at     
December 31, 1999.  The small reduction in spite of the losses and investments  
reflects the policies implemented to conserve cash and improve efficiency.      

At the end of 1999, there were no material capital spending commitments out-    
standing. The Company relies on outside vendors for all of its manufacturing.   
Consequently, the Company's operations do not require substantial capital       
expenditures other than for the periodic purchase of tooling, test equipment,   
and fixtures.  During 1999, the Company spent $115,468 for capital              
expenditures, which included computer hardware and development of software      
tools for TRAVEL*STAR 24.  Total capital expenditures are expected to be less   
than that total in 2000, based on the current business outlook.                 

In 1999, the Company negotiated a lending agreement with Southwest Bank of St.  
Louis that provides a credit facility of $1 million, secured by the Company's   
accounts receivable and inventories.  This credit facility, which expires on    
July 1, 2000, is expected to meet the Company's needs for the first six months  
of 2000, but additional short-term credit may be sought when fourth quarter     
production requirements become clearer based on early 2000 sales successes and  
projections.                                                                    

At December 31, 1999, the Company had working capital of $4.5 million as        
compared to working capital of $6.0 million at December 31, 1998.  Included in  
working capital at December 31, 1999 was $1.6 million in cash and cash          
equivalents, including $400,000 of restricted cash to collateralize Talon's     
line-of-credit with the Bank of New Zealand per our working agreement with      
Talon. Inventories decreased from $1,465,581, or 47% to $1,655,422 inclusive of 
the reserve for excess and obsolete inventory of $536,347.  Accounts receivable 
decreased by $1,621,698, or 52.2%, to $1,482,267.  The Company has collected    
approximately $800,000 of this amount through February 2000.                    

The net cash surplus from operating activities resulted from converting         
receivables and inventories to cash, offsetting the cash components of losses   
and accruals.  These latter were dominated by advertising expenses accrued for  
in 1998 but paid in 1999.  Significant investment cash flow events included the 
$400,000 restricted cash set-aside to collateralize the Talon line of credit    
with the Bank of New Zealand, the capitalization of software tools for          
compressing roadmap topology into a format suitable for TRAVEL*STAR 24, and the 
investments in Talon and Influence Data, L.L.C.                                 

IMPACT OF ACCOUNTING PRONOUNCEMENTS                                             

In June 1998 the Financial Accounting Standards Board issued Statement of       
Financial Accounting Standard No. 133 "Accounting for Derivative Instruments    
and Hedging Activities" (FAS 133). FAS 133 requires derivatives to be           
recognized as assets or liabilities on the balance sheet and measured at fair   
value. Changes in the fair value of derivatives should be recognized in         
either net income or other comprehensive income, depending on the designated    
purpose of the derivative. This statement, as amended, is effective for the     
Company on January 1, 2001, and the Company has not yet determined the effects  
this statement will have on its financial position or results of operations.    

Item 7. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE                                            

Not Applicable.                                                                 

Item 8. FINANCIAL STATEMENTS                                                    

The financial statements of Ultradata Systems, Incorporated, together with      
notes and the Report of Independent Certified Public Accountants, are set forth 
immediately following Item 13 of this Form 10-KSB.                              

PART III                                                                        

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;           
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT               

The following table lists certain information regarding the officers and        
directors of the Company as of March 31, 2000:                                  

NAME                     AGE     POSITION                   
--------------------------------------------------------------------------      
Monte Ross                  67      President & Chief Executive Officer,        
                                                  Director
Mark L. Peterson            43      Vice President-Engineering, Secretary,      
                                                  Director
Ernest Clarke               60      Vice President-Controller, Director         
Leonard Missler             54      Vice President-Software Development         
Duane Crofts                63      Vice President-Advanced Products            
David Biernbaum             45      Vice President                              
Daniel Muehlemann           35      Vice President-Sales                        
Steven H. Akre Esq.         47      Director                                    
John J. Clancy              63      Director                                    
Donald Rattner              67      Director                                    

Directors hold office until the annual meeting of the Company's stockholders    
and the election and qualification of their successors.  Officers hold office,  
subject to removal at any time by the Board, until the meeting of directors     
immediately following the annual meeting of stockholders and until their        
successors are appointed and qualified.                                         

Background of Directors and Executive Officers:                                 

Monte Ross founded the Company in 1986 and has served as its President, Chief   
Executive Officer and Chairman since inception. For over 20 years prior to      
founding the Company, Mr. Ross was employed by McDonnell Douglas Corporation    
in a variety of positions.  When he left McDonnell Douglas, Mr. Ross was        
Director of Laser Systems, responsible for the group of approximately 400       
employees, which developed the first laser space communication system and       
first space laser radar.  Mr. Ross is a Fellow of the Institute of Electrical   
and Electronic Engineers and the past President of the International Laser      
Communication Society.  Mr. Ross was awarded a Master of Science degree in      
Electrical Engineering by Northwestern University in 1962.  He is the father-   
in-law of Mark L. Peterson, the Company's Vice President-Engineering.           

Mark L. Peterson has been a Director of the Company since it was founded in     
1986. He has served as the Company's Vice President of Engineering since 1988.  
He is responsible for the design of the Company's hand-held products.  During   
the four years prior to joining the Company, Mr. Peterson was employed by       
McDonnell Douglas Corporation as an electronics engineer for fiber optic        
products and satellite laser cross-link programs.  Mr. Peterson was awarded a   
Master of Science degree in Electrical Engineering by Washington University in  
1980.  He is the son-in-law of Monte Ross.                                      

Ernest Clarke has been a Director of the Company since it was founded in 1986.  
He has been employed as the Company's Vice President - Controller since June of 
1999.  From August 1990 to June 1999 he was Vice President - Government         
Programs.  His primary responsibility has been the development of custom test   
systems for organizations involved in government laser systems programs.  For   
over 20 years prior to joining Ultradata, Mr. Clarke was employed by McDonnell  
Douglas Corporation in a variety of positions.  When he left McDonnell Douglas, 
Mr. Clarke was its Laser Product Development Manager with responsibility to     
supervise over 40 engineers.  Mr. Clarke was awarded a Master of Science degree 
in Electrical Engineering by Stanford University in 1966.                       

Leonard Missler has served as Vice President - Software Development for the     
Company since 1990.  His primary responsibility has been the development of     
software for the Company's hand-held products.  For over 20 years prior to      
joining Ultradata, Mr. Missler was employed in software and electronics         
development and management by Microterm, Inc., Magpower, Magnavox, and          
Interface Technology.  At Microterm, his most recent employer before joining    
the Company, Mr. Missler was the Director of Operations.  Mr. Missler was       
awarded a Master of Science degree in Electrical Engineering by Washington      
University in 1970.                                                             

Duane Crofts joined the Company as Vice President - Advanced Products in 1994.  
Prior to joining the Company, Mr. Crofts served for over five years as a        
Program Director with McDonnell Douglas Corporation.  In that role he was       
responsible for engineering management, production management, subcontract      
management, and program management.  Mr. Crofts most recently was manager of a  
multi-million dollar electro-optic development program.  Mr. Crofts was         
awarded a Bachelor of Science degree in Mechanical Engineering by the           
University of Missouri at Rolla.                                                

David Biernbaum joined the Company in 1997 as Vice President.  Prior to joining 
the Company, Mr. Biernbaum had twenty years experience in consumer products     
marketing, product development, sales management and finance. This experience   
was in positions such as Senior Vice President, Marketing for Vi-Jon            
Laboratories, Inc. a manufacturer of private label health and beauty care       
products and as Regional Marketing Director for The Gillette Company,           
responsible for market launches of new personal care products. Mr. Biernbaum    
holds a Master's degree in Marketing from Southern Illinois University.         

Daniel B. Muehlemann joined the Company in October 1996 as Vice President of    
Sales.  Prior to joining the Company, Mr. Muehlemann served for five years as   
Senior Accounts Manager for Maxim Technologies, Inc.  In that position he       
developed and implemented key sales and marketing strategies to increase        
Maxim Technology's national client base.  Mr. Muehlemann holds a Bachelor's     
degree in Communications from Southwest Missouri State University.              

Steven Akre has served as a member of the Board of Directors and as the         
corporate counsel for the Company since it was founded.  Mr. Akre is an         
attorney-at-law, whose specialization is in taxation and corporate mergers and  
acquisitions.                                                                   

John J. Clancy joined the Company in 1995 to serve as a member of the Board of  
Directors.  Mr. Clancy has served on the Board of Directors at Cimplex          
Corporation, Inc. in San Jose, and Engineering Software Research & Development, 
Inc. in St. Louis.  Mr. Clancy was employed by McDonnell Douglas in a variety   
of positions progressing from Programmer, to Salesman, to Divisional            
President.  Mr. Clancy was awarded a Bachelor of Science; Chemical Engineering: 
University of Illinois; Master of Science: The Johns Hopkins University;        
Master of Business Administration: Washington University - St. Louis; Master    
of Liberal Arts: Washington University - St. Louis; Doctor of Philosophy in     
History and Business: Washington University - St. Louis.                        

Donald Rattner joined the Company in 1999 to serve as a member of the Board of  
Directors.  Mr. Rattner is a member/partner in BrookWeiner, LLC, a Chicago-     
based accounting firm, and a member of the American Institute of Certified      
Public Accountants and the Illinois CPA Society.  He has served on the boards   
of several corporations.                                                        

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                               

None of the directors, officers or beneficial owners of more than 10% of the    
Company's common stock failed to file on a timely basis reports required during 
1998 by Section 16(a) of the Exchange Act, except as follows: each of the       
Company's five officers was late in filing a report on Form 4, each report      
containing one transaction.                                                     

Item 10. EXECUTIVE COMPENSATION                                                 

The following table sets forth all compensation awarded to, earned by, or paid  
by the Company to the following persons for services rendered in all capacities 
to the Company during each of the fiscal years ended December 31, 1999, 1998,   
and 1997:  (1) the Registrant's Chief Executive Officer, and (2) each of the    
other executive officers whose total salary and bonus for the fiscal year ended 
December 31, 1999 exceeded $100,000.                                            

                                               Annual                  Long-term
                                            Compensation            Compensation
                                ------------------- ----------------------------
Name & Position          Year    Salary        Bonus    Other (1)   Options     

Monte Ross,              1999   $ 142,588      $    -   $  6,000        (2)     
President                1998   $ 154,999      $    -   $  6,000        (3)     
                                         1997   $ 130,000      $   - $ 5,000 (4)

(1) Includes premium payments for a life insurance policy on Mr. Ross, with     
his estate as beneficiary.                                              
(2) During 1999 the Board's Stock Option Committee awarded Mr. Ross options     
to purchase an additional 10,000 shares of Common Stock at an exercise  
price of $2.00.                                                         
(3) During 1998 the Board's Stock Option Committee awarded Mr. Ross options     
to purchase an additional 6,000 shares of Common Stock at an exercise   
price of $3.00.                                                         
(4) During 1997 the Board's Stock Option Committee awarded Mr. Ross options     
to purchase an additional 12,500 shares of Common Stock at an exercise  
price of $5.75.                                                         

Employment Agreements; Royalty Agreement                                        

Messrs. Ross, Peterson, and Clarke have individual employment agreements with   
the Company beginning September 1, 1994.  Except as noted herein, the terms of  
the employment agreements are substantially identical.  The agreements were     
extended in 1997 by action of the Board of Directors to October 31, 2000.  The  
agreements provide for base salaries, which are adjusted annually by the Board  
of Directors.  If the majority of the Board cannot agree as to a level of       
salary adjustment, the salary will increase by 10% for Mr. Clarke and Peterson  
and 5% for Mr. Ross.  The employment agreements restrict each officer from      
competing with the Company for one year after the termination of his            
employment unless that employee establishes that his employment by a competitor 
will not involve the use of any information, which is considered confidential   
by the Company.  Mr. Biernbaum also has a separate employment agreement dated   
January 1, 1999, which provides for salary and conditions similar to the above  
officers.                                                                       

Leonard Missler, Vice President - Software Development, has a Royalty Agreement 
with the Company dated September 14, 1989.  The Agreement terminates on         
September 13, 2009.  Mr. Missler specifies in the Agreement that he will keep   
confidential all of the Company's information regarding its technology and      
products.  In exchange, the Agreement provides that the Company will pay Mr.    
Missler a royalty equal to 1% of net sales of the Company's ROAD WHIZ products  
and 0.5% of net sales of other products incorporating the ROAD WHIZ database.   
During the two years ended December 31, 1999 and 1998, royalty expense totaling 
$39,820 and $53,752, respectively, was recognized.                              

STOCK OPTION AWARDS                                                             

The following tables set forth certain information regarding the stock options  
acquired by the Company's Chief Executive Officer during the year ended         
December 31, 1999 and those options held by them on December 31, 1999:          

OPTION GRANTS IN CURRENT FISCAL YEAR                                            

         Percent
          of total
                                         options            Potential realizable
                    Number of    Granted                        value at assumed
                    Securities   to                              annual rates of
                  Underlying   Employees   Exercise             Appreciation
                    Option       in fiscal   Price    Expiration for option term
Name         Granted      Year        ($/share) Date         5%       10%       
------------------------------------------------------------------------------  
Monte Ross   10,000       9.7%        $  2.00   12/31/04    $ 5,526  $ 12,210   

AGGREGATED FISCAL YEAR OPTION VALUES                                            

Number of securities underlying                     
                     Unexercised options at    Value of unexercised in-the-money
      fiscal year-end (#)(All         Options at fiscal year-end
Name          Exercisable)                    (all exercisable)                 
------------------------------------------------------------------------------- 
Monte Ross    73,500                          $       -                         

Stock Option Plans                                                              

THE 1994 STOCK OPTION PLAN                                                      

On September 28, 1994, the Board of Directors of the Company adopted and the    
shareholders approved the Ultradata Systems, Inc. 1994 Stock Option Plan (the   
"Option Plan").  The Option Plan is designed to permit the Company to grant     
either incentive stock options under Section 422A of the Internal Revenue Code  
(the "Code") or non-qualified stock options.  Under the Option Plan, a Stock    
Option Committee (the "Option Committee") of the Board is authorized to grant   
options to purchase up to 175,000 shares of stock to key employees, officers,   
directors, and consultants of the Company.  The Option Committee administers    
the Option Plan and designates the optionees, the type of options to be granted 
(i.e., non-qualified or incentive stock options), the number of shares subject  
to the options, and the terms and conditions of each option.  The terms and     
conditions include the exercise price, date of grant, and date of exercise of   
each option.  An employee may, at the discretion of the Option Committee, be    
permitted to exercise an option and make payment by giving a personal note.     

Incentive stock options may only be granted to employees of the Company and not 
to directors or consultants who are not so employed.  The exercise price for    
incentive stock options must be at least one hundred percent (100%) of the      
fair market value of the Common Stock as determined by the Option Committee on  
the date of grant.  All incentive stock options under the Option Plan must be   
granted within ten years from the date of adoption of the Option Plan and each  
option must be exercised, if at all, within five years of the date of grant.    
In no event may any employee be given incentive stock options whereby more than 
$100,000 of options can be exercised for the first time in a single calendar    
year.  All incentive stock options must be exercised by an optionee within 30   
days after termination of optionee's employment, unless such termination is as  
a result of death, disability, or retirement.  In the event an optionee's       
employment is terminated as a result of death or disability, such optionee or   
his designated beneficiary shall be entitled to exercise any and all options    
for a period of six months after such termination.  If an optionee's employment 
is terminated as a result of retirement, the optionee shall be entitled to      
exercise his options for a period of three months following such termination.   

Non-qualified stock options under the Option Plan are generally subject to the  
same rules as discussed above.  Non-qualified stock options may, however, also  
be granted to directors and consultants, whether or not such individuals are    
employees of the Company.  The exercise price for non-qualified stock options   
may not be granted at less than eighty-five percent (85%) of the fair market    
value of the shares on the date of grant.                                       

THE 1996 STOCK OPTION PLAN                                                      

The 1996 Plan is designed to permit the Company to grant either incentive stock 
options under Section 422A of the Internal Revenue Code (the "Code") or non-    
qualified stock options.  Under the 1996 Plan, a Stock Option Committee (the    
"Option Committee") of the Board is authorized to grant options to purchase up  
to 175,000 shares of stock to key employees, officers, directors and            
consultants of the Company.  The Option Committee administers the 1996 Plan and 
designates the optionees, the type of options to be granted (i.e., non-         
qualified or incentive stock options), the number of shares subject to the      
options, and the terms and conditions of each option.  The terms and conditions 
include the exercise price, date of grant, and date of exercise of each         
option.  An employee may, at the discretion of the Option Committee, be         
permitted to exercise an option and make payment by giving a personal note.     

Incentive stock options may only be granted to employees of the Company and not 
to directors or consultants who are not so employed.  The exercise price for    
incentive stock options must be at least one hundred percent (100%) of the fair 
market value of the Common Stock as determined by the Option Committee on the   
date of grant.  All incentive stock options under the 1996 Plan must be granted 
within ten years from the date of adoption of the Option Plan and each option   
must be exercised, if at all, within five years of the date of grant.  In no    
event may any employee be given incentive stock options whereby more than       
$100,000 of options become exercisable for the first time in a single calendar  
year.  All incentive stock options must be exercised by an optionee within 30   
days after termination of optionee's employment, unless such termination is as  
a result of death or disability. In the event an optionee's employment is       
terminated as a result of death or disability, such optionee or his designated  
beneficiary shall be entitled to exercise any and all options for a period of   
six months after such termination.  If an optionee's employment is terminated   
as a result of retirement, the optionee shall be entitled to exercise his       
options for a period of three months following such termination.                

Non-qualified stock options under the 1996 Plan are generally subject to the    
same rules as discussed above.  Non-qualified stock options may, however, also  
be granted to directors and consultants, whether or not such individuals are    
employees of the Company.  The exercise price for non-qualified stock options   
may not be granted at less than eighty-five percent (85%) of the fair market    
value of the shares on the date of grant.                                       

In December 1998, the Board of Directors approved a resolution to increase the  
number of shares authorized under the 1996 option plan by 100,000 shares to     
provide continued incentive for key personnel.  None of these shares will be    
granted until this matter is approved by stockholders.                          

During 1998, the Company canceled incentive stock options to purchase 236,292   
shares of Common Stock at exercise prices ranging from $5.00 to $7.00.  The     
same number of new options was issued at a price of $4.00.  There were no       
cancellations for the purpose of repricing during 1999.                         

During 1999 the Company issued additional incentive stock options to purchase   
103,538 shares of Common Stock at an exercise price between $1.44 and $2.13.    
The following officers have received a cumulative total number of options shown 
below since the inception of the plans at the weighted average exercise price   
given:                                                                          

NAME              Number of Shares  Average Exercise Price                      
----------------------------------------------------------                      
Monte Ross        73,500            $   3.65                                    
Mark L. Peterson  58,000            $   3.24                                    
Ernest Clarke     34,500            $   3.54                                    
Leonard Missler   25,500            $   3.45                                    
Duane Crofts      27,000            $   3.48                                    
David Biernbaum   38,500            $   3.56                                    
Daniel Muehlemann 14,500            $   3.03                                    

REMUNERATION OF DIRECTORS                                                       

Prior to April 21, 1994, the Directors of the Company who were not officers     
received 208 shares of Common Stock per meeting as compensation for their       
services.  That policy was terminated on April 21, 1994.  Outside Directors now 
receive $500 per meeting and are reimbursed for out-of-pocket expenses incurred 
on the Company's behalf.                                                        

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

The following table sets forth the beneficial ownership of outstanding shares   
of Common Stock of the Company as of March 25, 2000 by any person who, to the   
knowledge of the Company, owns beneficially more than 5% of the outstanding     
Common Stock, by all directors of the Company, by all executive officers, and   
by the directors and officers of the Company as a group.  Shares are owned of   
record except where otherwise noted.  None of the persons identified below owns 
any securities of the Company other than the Common Stock listed below:         

                                                                      Amount and
                                                                       Nature of
      Name and Address of    Beneficial      Percentage of
Title of Class   Beneficial Owner (1)   Owner           Class (8)               
---------------------------------------------------------------------           
Common           Monte Ross             452,500 (2)     13.93%                  
Common           Mark L. Peterson       162,382 (3)      5.11%                  
Common           Ernest Clarke          165,352 (4)      5.15%                  
Common           Steven H. Akre Esq.(4)   4,496 (5)      0.14%                  
Common           Donald Rattner          14,000          0.44%                  
Common           John J. Clancy           3,692 (6)      0.12%                  
Common           Officers and Directors                                         
As a Group                    
                (10 persons)          901,565 (7)     26.18%

(1) The address of each of these shareholders is c/o Ultradata Systems,         
Incorporated, 9375 Dielman Industrial Drive, St. Louis, Missouri 63132  
(2) Includes 236,000 shares owned by the Monte Ross and Harriet J. Ross Living  
   Trust.  Mr. Ross and his wife share investment control over the trust; they
may revoke it or amend it at will; and they receive all income from the 
   trust during the life of either of them.  Also includes options to purchase
73,500 shares.                                                          
(3) Includes 91,964 shares owned by the Mark L. Peterson and Ryia Peterson      
 Living Trust and 8,318 owned by Ryia Peterson.  Mr. Peterson and his wife
  share investment control over the trust; they may revoke it or amend it at
  will; and they receive all income from the trust during the life of either
of them.  Also includes options for 58,000 shares.                      
(4) Includes options for 34,500 shares.                                         
(5) 3,120 shares owned by the G. Akre Irrevocable Trust, over which Mr. Akre's  
wife has investment control.  Also includes options for 1000 shares.    
(6) Includes options for 3,692 shares.                                          
(7) Includes options for 267,192 shares.                                        
(8) In determining the percentage of outstanding shares, all presently          
exercisable options owned by the shareholder or the group are treated as
having been exercised.                                                  

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

On September 17, 1994, the Board of Directors of the Company approved the sale  
of 150,000 shares of Common Stock to the Company's three officers/directors as  
follows:                                                                        
                                       Shares            Notes

Monte Ross             100,000         $  187,500               
Mark L. Peterson        25,000         $   46,875               
Ernest Clarke           25,000         $   46,875               
                        -------           --------
TOTAL    150,000         $  281,250 
                                    =======           ========

The purchase price for the shares was $1.875 per share, which was paid by each  
officer/director in the form of a promissory note bearing interest at 6% per    
annum.  The principal amount of each note, plus accrued interest, is payable on 
July 1, 2001.                                                                   

In August and September of 1994 nine employees of the Company, including all    
five of its officers, exercised incentive stock options and paid the purchase   
price of $1.20 per share by delivering to the Company promissory notes.  The    
promissory notes bear interest at 6% per year and are payable upon the earlier  
of the date on which the employee's employment by the Company is terminated or  
the date on which the employee sells the shares.  The number of shares so       
purchased and the principal amount of the notes given were as follows:          

Employee               Shares            Notes                  

Monte Ross            55,734          $  67,000                 
Mark Peterson         13,725          $  16,500                 
Ernest Clarke         13,725          $  16,500                 
Leonard Missler       17,676          $  21,250                 
Duane Crofts           2,080          $   2,500                 
Other Employees          416          $     500                 
                    -------           --------
TOTAL         103,340          $ 124,250          
                    =======           ========
On June 11, 1999, three of the officers of the Company surrendered a portion of 
the shares they had purchased in exchange for forgiveness of a portion of the   
notes.  The surrendered shares were valued at the weighted average market price 
for the 30 trading days preceding that date per board resolution.  The number   
of shares so purchased and the number so surrendered is set forth below:        

                                        Shares Purchased      Shares Surrendered
                        ---------------------------- ---------------------------
                         Total      Price     Average    Total    Price  Average

Monte Ross      155,734    $254,500    $1.63    100,000  $215,000  $2.145       
Mark Peterson    38,725    $ 63,375    $1.64     37,423  $ 80,459  $2.145       
Leonard Missler  17,676    $ 21,250    $1.20     12,548  $ 26,978  $2.145       

The Company has an agreement with Leonard Missler, its Vice President -         
Software Development, under which, through September 13, 2009, it pays Mr.      
Missler a 1% royalty on all net sales of ROAD WHIZ( products and 0.5% on net    
sales of other products incorporating the ROAD WHIZ( database.  During the      
years ended December 31, 1999 and 1998, the Company paid royalties to Mr.       
Missler of $39,820 and $53,752, respectively.                                   

Steven H. Akre, Esquire, a member of the Company's Board of Directors, has      
performed legal services as general counsel for the Company since its           
inception.  During 1999 and 1998, Mr. Akre's firm was paid $108,411 and         
$103,984, respectively, for legal services.                                     

Item 13. EXHIBITS, LIST, AND REPORTS                                            

(a)     Financial Statements                                                    
List of Financial Statements Under Item 7 of this Report:                     

Report of Independent Certified Public Accountants                            
Balance Sheet as of December 31, 1999.                                        
Statements of Operations for each year in the two-year period ended December  
31, 1999.                                                                   
Statements of Stockholders' Equity for each year in the two-year period ended 
December 31, 1999.                                                          
Statements of Cash Flows for each year in the two-year period ended December  
31, 1999.                                                                   
Notes to Financial Statements for each year in the two-year period ended      
December 31, 1999.                                                          

(b)    Exhibits Index and Reports on Form 8-K                                   
Exhibit Number                                                              
3-a.    Articles of Incorporation, and 1989 amendment. (1)                  
3-a.(1) Amendment to Articles of Incorporation dated March 4, 1991,         
March 22, 1994, and November 18, 1994. (1)                
3-a.(2) Certification of Correction of Articles of Incorporation. (1)       
3-b.    By-laws. (1)                                                        
4-a.    Specimen of Common Stock Certificate. (1)                           
10-a.   Lease dated May 23, 1990, as amended on November 31, 1993, for      
              premises at 9375 Dielman Industrial Drive, St. Louis, Missouri.(1)
10-a.(1)Lease Addendum dated October 17, 1995, for premises at 9375 Dielman 
Industrial Drive, St. Louis, Missouri.(1)   
10-b.   1994 Stock Option Plan.(1)                                          
10-c.   Employment Agreement with Monte Ross.(1)                            
10-d.   Employment Agreement with Mark L. Peterson.(1)                      
10-e.   Employment Agreement with Ernest Clarke.(1)                         
10-f.   Royalty Agreement dated September 14, 1989, between the Company and 
Leonard Missler.(1)                         
10-f.   Modification Agreement dated November 4, 1995, to Royalty Agreement 
               dated September 14, 1989,   between the Company and Leonard
Missler. (1)                                
10-o    Extended employment agreement as of September 30, 1997 between the  
Company and Monte Ross (3)                                
10-p    Extended employment agreement as of September 30, 1997 between the  
Company and Mark L.  Peterson (3)           
10-q    Extended employment agreement as of September 30, 1997 between the  
Company and Ernest Clarke    (3)            
10-r    Employment Agreement as of October 13, 1997 between the Company and 
David Biernbaum (3)                         
21.     Subsidiaries - None.                                                
23.     Consent of BDO Seidman, LLP (2)                                     
27.     Article 27 Financial Data Schedule (2)                              

(1) Previously filed as an exhibit to the Company's Registration                
 Statement on Form SB-2 (33-85218 C) and incorporated herein by reference.
(2) Filed herewith.                                                             
(3) Previously filed on Form 10-KSB for the period ended December 31, 1997,     
and incorporated herein by reference.                                   

(c)     Reports on Form 8-K                                                     
None during the fourth quarter                                          

Report of Independent Certified Public Accountants                              

The Board of Directors and Stockholders                                         
Ultradata Systems, Incorporated:                                                

We have audited the accompanying balance sheet of Ultradata Systems,            
Incorporated, as of December 31, 1999 and the related statements of operations, 
stockholders' equity and cash flows for the years ending December 31, 1999 and  
1998. These financial statements are the responsibility of the Company's        
management. Our responsibility is to express an opinion on these financial      
statements based on our audits.                                                 

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurances about whether the financial statements are free from      
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Ultradata Systems,             
Incorporated at December 31, 1999, and the results of operations and its cash   
flows for the years ended December 31, 1999 and 1998 in conformity with         
generally accepted accounting principles.                                       

March 2, 2000                                                                   
St. Louis, Missouri                                                             
(signed) BDO Seidman, LLP                                                       

ULTRADATA SYSTEMS, INCORPORATED                                                 

Balance Sheet                                                                   

                                                       December 31, 1999

Assets                                                                          

Current assets:                                                                 

Cash and cash equivalents             $ 1,220,134                             
Restricted cash                           410,888                             
Trade accounts receivable, net of                                             
allowance for doubtful accounts of                                          
$16,475                                1,482,267                            
Inventories                             1,655,422                             
Prepaid expenses and other current                                            
assets                                   105,778                            
                                                                       ---------
Total current assets                     4,874,490                              
                                                                       ---------

Property and equipment, net                683,936                              
                                                                       ---------
Total property and equipment               683,936                              
                                                                       ---------

Investments, available for sale            105,834                              
Investment in Talon Research and                                                
Development, Ltd.                         827,903                             
Investment in Influence Data, LLC          255,667                              
Advances to affiliates                     272,683                              
Advertising credits                        249,685                              
Other assets                                38,594                              
                                                                       ---------
Total assets                            $7,308,792                              
                                                                       =========

Liabilities and Stockholders' Equity                                            

Current liabilities:                                                            

Accounts payable                          156,214                             
Accrued expenses and other liabilities    262,464                             
                                                                       ---------
Total current liabilities                  418,678                              

Deferred rent                               13,684                              
Deferred compensation liability            116,722                              
                                                                       ---------
Total liabilities                          549,084                              

Commitments and contingencies                                                   

Stockholders' equity:                                                           

Common stock, $.01 par value;                                                 
10,000,000 shares authorized;                                               
3,410,000 shares issued and                                                 
outstanding at December 31, 1999          34,100                            
Additional paid-in capital             9,851,894                            
Accumulated Deficit                   (2,024,687)                           
Treasury stock (326,171 shares at                                           
cost as of December 31, 1999)          (942,311)                          
Notes receivable issued for purchase                                        
of common stock                        (197,117)                          
Accumulated other comprehensive                                             
income, net                              37,829                           
                                                                      ----------
Total stockholders' equity               6,759,708                              
                                                                      ----------
Total liabilities and stockholders'                                             
equity                                 $7,308,792                             
                                                                       =========

See accompanying summary of accounting policies and notes to financial          
statements.                                                                     

ULTRADATA SYSTEMS, INCORPORATED                                                 

Statements of Operations                                                        

Years ended December 31, 1999 and 1998                                          

                                                                       1999 1998

Net sales:                                                                      
Consumer products                          $ 5,566,626      $ 6,983,804       
Contract                                             -          250,271       
                                                             --------- ---------
Total net sales                               5,566,626        7,234,075        

Cost of sales:                                                                  
Consumer products                            3,120,941        3,901,909       
Contract                                        30,105          270,292       
                                                             --------- ---------
Total cost of sales                           3,151,046        4,172,201        

Gross profit                                  2,415,580        3,061,874        

Selling expense                               1,812,524        2,931,150        
General and administrative expenses           2,063,015        2,818,201        
Research and development expense                358,357          672,090        
                                                             --------- ---------
Operating loss                               (1,818,316)      (3,359,567)       
                                                             --------- ---------
Other income (expense):                                                         
Interest expense                                     -           (3,790)      
Interest income                                 93,848          161,612       
Equity (loss) earnings in affiliated                                          
companies                                    (81,118)         118,733     
Royalty income                                 127,473                -       
Other, net                                      51,099           27,195       
                                                              --------- --------
Total other income (expense)                    191,302          303,750        

Loss before income tax expense               (1,627,014)      (3,055,817)       

Income tax expense (benefit)                    370,236         (725,024)       
                                                             --------- ---------
Net loss                                    $(1,997,250)     $(2,330,793)       
                                                             ========= =========
Loss per share:                                                                 

        Basic and diluted                          $     (0.64)     $     (0.71)
                                                                 ======= =======
Weighted Average Shares Outstanding:                                            

       Basic and diluted                            3,122,138        3,299,636
                                                             ========= =========

See accompanying summary of accounting policies and notes to financial          
statements.                                                                     

ULTRADATA SYSTEMS, INCORPORATED                                                 

Statements of Stockholders' Equity                                              

                                                        [Enlarge/Download Table]

Years ended December 31, 1998 and 1999           Notes                                                                                    
                                                 receivable                                                                               
                                                                                                  for                                     
                           Additional    Retained              purchase Accumulated                                                       
                                  paid          earnings              of       comprehensive  Total                                       
                 Common    in            (deficit) Treasury    Stock    income         Stockholders'                                      
                 Stock     capital                 Stock                net            Equity                                             

=====================================================================================================                                     
                                                                                                                                          

Balance at                                                                                                                                
January 1, 1998  $34,100  $ 9,799,936  $ 2,303,356 $(130,062) $(410,500) $ 62,740      $ 11,659,570                                       

Purchase of                                                                                                                               
232,200 shares                                                                                                                            
of treasury stock                                                                                                                         
at cost                                             (770,219)                              (770,219)                                      

Repayment of                                                                                                                              
notes receivable                                                                                                                          
issued for purchase                                                                                                                       
of common stock                                                   5,000                       5,000                                       

Accrued interest                                                                                                                          
on notes receivable                                                                                                                       
issued for purchase                                                                                                                       
of common stock                                                (100,049)                   (100,049)                                      

Comprehensive income:                                                                                                                     
Net loss                               (2,330,793)                                       (2,330,793)                                      

Other comprehensive loss,                                                                                                                 
 net of tax:                                                                                                                              
 Net unrealized gain on                                                                                                                   
 deferred compensation                                                                                                                    
 trust available for sale                                                                                                                 
 Securities                                                               23,736            23,736                                        

                                                                                        Total comprehensive loss               (2,307,057)

=====================================================================================================                                     

Balance at December                                                                                                                       
31, 1998         $34,100  $9,799,936   $  (27,437) $(900,281) $(505,549) $86,476       $ 8,487,245                                        

Purchase of 1,000                                                                                                                         
shares of Treasury                                                                                                                        
stock at cost                                         (2,125)                               (2,125)                                       

Issuance of 80,000                                                                                                                        
shares of                                                                                                                                 
treasury stock for                                                                                                                        
investment                                                                                                                                
in Influence Data,LLC         45,418                 281,782                               327,200                                        

Redemption of 149,971                                                                                                                     
shares of                                                                                                                                 
common stock to                                                                                                                           
reduce notes                                                                                                                              
receivable                                          (321,687)   321,687                          -                                        

Accrued interest on                                                                                                                       
notes                                                                                                                                     
receivable issued                                                                                                                         
for purchase of                                                                                                                           
common stock                                                    (13,257)                   (13,257)                                       

Issuance of stock options                                                                                                                 
to non-employee for                                                                                                                       
services performed             6,540                                                         6,540                                        

Comprehensive income                                                                                                                      
Net loss                               (1,997,250)                                      (1,997,250)                                       
Other comprehensive loss:                                                                                                                 
Net unrealized loss on                                                                                                                    
deferred compensation                                                                                                                     
trust available for sale                                                                                                                  
Securities                                                               (48,647)          (48,647)                                       
Total comprehensive loss                                                                                                                  
                                                                                                                  (2,045,897)             
----------------------------------------------------------------------------------------------------                                      
Balance at December                                                                                                                       
31, 1999         $34,100  $9,851,894  $(2,024,687) $(942,311) $(197,117) $37,829       $ 6,759,708                                        
                  ==================================================================================                                      


See accompanying summary of accounting policies and notes to financial          
statements.                                                                     

ULTRADATA SYSTEMS, INCORPORATED                                                 

Statements of Cash Flows                                                        

Years ended December 31, 1999 and 1998                                          

                                                                       1999 1998

Cash flows from operating activities:                                           
Net loss                                  $(1,997,250)     $(2,330,793)     

Adjustments to reconcile net loss to net                                        
cash provided by (used in)                                                    
Operating activities:                                                         

Depreciation and amortization                 259,870          246,435      
Loss on disposal of property and equipment      6,969                -      
Deferred income tax provision                 476,149         (493,797)     
Non-cash compensation expense                   6,540                -      
Inventory reserve                              67,137          469,210      
Equity in losses (earnings) of                                              
unconsolidated affiliates                     81,118         (118,733)    
Realized (gain) loss on investments           (22,602)          23,736      
Increase in allowance for uncollectible                                     
notes receivable                              31,000          416,428     
Increase (decrease) in cash due to changes                                  
in operating assets and liabilities:                                      
Trade accounts receivable, net          1,621,698       (1,431,923) 
Costs and estimated earnings on                                     
long-term contracts                       95,534          433,086 
Inventories                             1,148,759          (85,378) 
Prepaid expenses and other current                                  
assets                                   675,216         (193,399)
Accounts payable                         (784,008)         430,885  
Accrued expenses and other liabilities (1,358,867)       1,192,068  
Tax benefit receivable                    231,227         (231,227) 
Deferred rent                              (7,464)           4,976  
Deferred compensation trust liability     (33,980)          23,961  
Other assets                               21,615          (30,409) 
                                                            --------- ----------
Net cash (used in) provided by operating                                        
activities                                     518,664       (1,674,874)      
                                                            --------- ----------
Cash flows from investing activities:                                           
Investment and earnings of affiliated company  (17,133)        (387,475)      
Option to acquire additional interest in                                      
affiliated company                                  -         (314,147)     
Deferred compensation trust investments         30,158          (23,736)      
Investment in software development                   -         (109,365)      
Advances to affiliated company                 (49,680)        (250,000)      
Restricted cash increases                     (398,373)            (225)      
Capital expenditures                          (115,468)        (296,836)      
                                                             -------- ----------
Net cash used in investing activities          (550,496)      (1,381,784)       

Cash flows from financing activities:                                           
Repurchase of common stock at cost             (2,125)        (770,219)     

Proceeds from repayment of notes receivable to                                  
purchase common stock                               -            5,000      
                                                              -------- ---------
Net cash provided by (used in) financing                                        
activities                                     (2,125)        (765,219)     
                                                              -------- ---------
Net increase (decrease) in cash and cash                                        
equivalents                                    (33,957)      (3,821,877)      

Cash and cash equivalents at beginning of                                       
year                                         1,254,091        5,075,968       
                                                             --------- ---------
Cash and cash equivalents at end of year    $ 1,220,134      $ 1,254,091        
                                                             ========= =========

See accompanying summary of accounting policies and notes to consolidated       
financial statements.                                                           

Summary of Significant Accounting Policies                                      

Basis of Presentation                                                           

The financial statements include the equity in earnings of unconsolidated       
affiliates Talon Research & Development Co., Ltd. (Talon) of Auckland New       
Zealand, and Influence Data, LLC. The investments in Talon and Influence Data,  
LLC are accounted for using the equity method.  The Company has a 24.9%         
interest in Talon and a 33.3% interest in Influence Data, LLC.                  

Use of Estimates                                                                

The financial statements have been prepared in conformity with generally        
accepted accounting principles and, as such, include amounts based on informed  
estimates and adjustments by management, with consideration given to            
materiality. Actual results could vary from those estimates.                    

Cash and Cash Equivalents                                                       

For financial statement presentation purposes, cash and cash equivalents        
include deposits with initial maturities of less than three months, including   
money market accounts with investments in marketable securities.                

Restricted Cash                                                                 

Restricted cash includes a deposit maintained in conjunction with the Company's 
agreement to guarantee Talon credit with the Bank of New Zealand and money-     
market funds related to the deferred compensation trust.  The cash amounts are  
restricted from use in operational activities of the Company.                   

Revenue Recognition                                                             

Net sales are recognized when products are shipped. The Company has established 
programs, which, under specified conditions, enable customers to return         
product. The Company establishes liabilities for estimated returns at time of   
shipment. In addition accruals for customer discounts and rebates are recorded  
when revenues are recognized.                                                   

Revenue under the Company's long-term contract is recognized on the percentage  
of completion method based upon incurred costs compared to total estimated      
costs under the contract.  Revisions to assumptions and estimates, primarily    
in contract value and estimated costs, used for recording sales and earnings    
are reflected in the accounting period in which the facts become known.         

Royalties are earned based on sale of products.                                 

Inventories                                                                     

Inventories are valued at the lower of cost or market.  Cost is determined      
using the first-in, first-out (FIFO) method. Provision for potentially          
obsolete or slow moving inventory is made based on management's analysis of     
inventory levels and future sales forecasts.                                    

Property and Equipment                                                          

Property and equipment are stated at cost.  Maintenance and repairs are         
expensed as incurred.  Major improvements, which materially extend useful       
lives, are capitalized.  The Company capitalizes certain software development   
costs in accordance with the American Institute of Certified Public             
Accountants Statement of Position No. 98-1, "Accounting for the Costs of        
Software Developed or Obtained for Internal Use."  Costs incurred for the       
Company's own personnel who are directly associated with software development   
are capitalized.  Capitalized software costs will be amortized over an estimated
useful life of five years.  Depreciation is provided on the straight-line basis 
over the estimated useful lives of the assets, generally five years.  Leasehold 
improvements are amortized over the shorter of the term of the related lease    
or its useful life. The Company continually reviews property and equipment to   
determine that the carrying values are not impaired.                            

Long-Lived Assets                                                               

In accordance with SFAS 121, long-lived assets and certain identifiable         
intangible assets held and used by the Company are reviewed for impairment      
whenever events or changes in circumstances indicate that the carrying amount   
of an asset may not be recoverable. For purposes of evaluating the              
recoverability of long-lived assets, the recoverability test is performed using 
undiscounted net cash flows related to the long-lived assets. The Company       
reviews long-lived assets to determine that carrying values are not impaired.   
No assets are impaired at December 31, 1999.                                    

Operating Lease                                                                 

Lease expense on the corporate facilities is recognized on a straight-line      
basis over the primary term of the lease.  The lease provides for accelerating  
rent over the lease term.  Accordingly, deferred rent has been recorded in the  
Company's balance sheet.                                                        

Advertising                                                                     

The Company expenses the production costs of advertising the first time         
advertising takes place, except for direct response advertising, which is       
capitalized and amortized over its expected period of future benefits, and      
advertising credits acquired by barter, which are amortized as the advertising  
credits are utilized.                                                           

At December 31, 1999, $249,685 of advertising credits are reported as an        
asset. These credits were exchanged for discontinued or slow-moving inventory   
in a barter transaction, and will be utilized at seasonal sales periods         
throughout 2000.  The credits will convert to advertising expense at the time   
the credits are used.  Advertising expense totaled $1,446,225 and $2,416,886    
for fiscal years ended December 31, 1999 and 1998.                              

Goodwill                                                                        

The excess of the purchase price of net assets acquired in equity investments   
over their fair value is being amortized on a straight-line basis not to exceed 
10 years.                                                                       

Fair Value of Financial Instruments                                             

FAS 107 "Disclosure About Fair Value of Financial Instruments," requires        
certain disclosures regarding the fair value of financial instruments. Cash and 
cash equivalents, accounts receivable, accounts payable, and accrued            
liabilities are reflected in the financial statements at fair value because of  
the short-term maturity of the instruments.                                     

Research and Development Costs                                                  

Research and development costs consist primarily of expenditures incurred       
bringing a new product to market or significantly enhancing existing products.  
The Company expenses all research and development costs as they are incurred    
unless they are associated with the development of tools or processes for       
production used in-house rather than for product delivered to a customer.       

Deferred Compensation Trust Investments                                         

Investments are stated at the estimated fair value in accordance with Statement 
of Financial Accounting Standards No. 115, "Accounting for Certain Investments  
in Debt and Equity Securities", and consist of investments in U.S. government   
agency securities or corporate stocks.  The deferred compensation trust         
represents contributions made by the Company to a Rabbi trust.  The amounts are 
restricted from use for operational purposes, and investment decisions are made 
by the trust beneficiary.                                                       

Available-for-sale securities, which include any security for which the         
beneficiary has no immediate plan to sell but which may be sold in the future,  
are valued at fair value.  Realized gains and losses, based on the amortized    
cost of the specific security, are included in other income as investment gains 
(losses).  Unrealized gains and losses are recorded, net of related income tax  
effects, as a separate component of equity.                                     

Royalty Expense                                                                 

Royalty expense is recognized on a pro rata basis as units are sold.            

Income Taxes                                                                    

Deferred tax assets and liabilities are recognized for the future tax           
consequences attributable to differences between the financial statement        
carrying amounts of existing assets and liabilities and their respective tax    
bases and operating loss and tax credit carry-forwards.  Deferred tax assets    
and liabilities are measured using enacted tax rates expected to apply to       
taxable income in the years in which those temporary differences are expected   
to be recovered or settled.  The effect on deferred tax assets and liabilities  
of a change in tax rates is recognized in income in the period that includes    
the enactment date.                                                             

Earnings Per Share                                                              

Basic earnings per share is calculated by dividing net income for the period    
by the weighted average number of shares of common stock outstanding during the 
period. The assumed exercise of stock options and warrants is included in the   
calculation of diluted earnings per share, if dilutive.                         

Stock-based Compensation                                                        

The Company grants stock options for a fixed number of shares to employees with 
an exercise price greater than or equal to the fair value of the shares at the  
date of grant. The Company accounts for stock options in accordance with        
Accounting Principles Board Opinion No. 25 (APB Opinion No. 25) "Accounting for 
Stock Issued to Employees." The Opinion requires that compensation cost related 
to fixed stock option plans be recognized only to the extent that the fair      
value of the shares at the date of grant exceeds the exercise price.            
Accordingly the Company recognizes no compensation expense for its stock        
option grants.                                                                  

In October 1995, the Financial Accounting Standards Board (FASB) issued SFAS    
No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 allows         
companies to continue to account for their stock option plans in accordance     
with APB No. 25, but encourages the adoption of a new accounting method based   
on the estimated fair value of employee stock options. Pro forma net income and 
income per share, determined as if the Company had applied SFAS No. 123, are    
discussed with Note 13.                                                         

Reclassifications                                                               

Certain 1998 balances have been reclassified to conform to the 1999             
presentation.                                                                   

Impact of Recent Accounting Pronouncements                                      

In June 1998 the Financial Accounting Standards Board issued Statement of       
Financial Accounting Standard No. 133 "Accounting for Derivative Instruments    
and Hedging Activities" (FAS133). FAS 133 requires as derivatives to be         
recognized as assets or liabilities on the balance sheet and measured at fair   
value. Changes in the fair value of derivatives should be recognized in either  
net income or other comprehensive income, depending on the designated purpose   
of the derivative. This statement, as amended, will be effective for the        
Company on January 1, 2001, and the Company has not yet determined the effects  
this statement will have on its financial position or results of operations.    

Significant Customers                                                           

For the year ended December 31, 1999, the company relied on four customers for  
approximately 19.8%, 14.6%, 10.5%, and 10.3% of consumer product sales.         
Accounts receivable from those customers totaled $623,030, $363,630, $0, and    
$66,240, respectively, at December 31, 1999.                                    

For the year ended December 31, 1998, the customer relied on two customers for  
approximately 21.6% and 19.7% of consumer product sales, respectively.          
Accounts receivable from those customers totaled $1,175,214 and $310,798,       
respectively, at December 31, 1998.                                             

Note 1. Nature of Operations                                                    

The principal business activity of Ultradata Systems, Incorporated (the         
Company), located in  St. Louis, Missouri, is the design, manufacture, and      
sale of hand-held electronic information products.  The Company sells the       
products in the United States through direct marketing and through independent  
sales representatives, mail order catalogs and mass market retailers.           

Note 2. Inventories                                                             

Inventories at December 31, 1999 consist of the following:                      

Raw Materials           $  815,337                            
Work in Process             62,360                            
Finished Goods           1,314,072                            
                             ---------
                             2,191,769
Reserve for obsolescence  (536,347)                           
                             ---------
            $1,655,422
                             =========

Note 3. Prepaid Expenses                                                        

Prepaid expenses at December 31, 1999 consist of the following: 

Prepaid advertising      $   24,781                             
Other prepaid expenses       80,997                             
                              --------
                            $  105,778
                              ========

Note 4. Property and Equipment                                                  

    Property, plant and equipment, as of December 31, 1999 consisted of:

Research & development equipment  $  160,890                    
Production equipment                  45,051                    
Tooling and test equipment           790,811                    
Office furniture and equipment       394,878                    
Sales displays                        52,101                    
Leasehold Improvements               141,671                    
Construction in progress - software  130,915                    
                                                               ---------
                                                               1,716,317
Less: accumulated depreciation                                  
and amortization             1,032,381              
                                                               ---------
                                                              $  683,936
                                                               =========

Depreciation and amortization expense for the years ended December 31, 1999     
and 1998 totaled $259,870 and $246,435, respectively.  Estimated costs to       
complete construction in progress at December 31, 1999 was $75,000.             

Note 5. Comprehensive Income                                                    

The Company follows SFAS No. 130, "Reporting Comprehensive Income".  This       
statement establishes standards for reporting and display of comprehensive      
income and its components.                                                      

The components of other comprehensive income (loss), net, are as follows:       

                                                         Year ended December 31,
                                                                       1999 1998

Unrealized losses on deferred                                                   
compensation investments:                                                     
Unrealized (losses) gains arising                                           
during the period, net                 $(62,661)       $23,736            
Reclassification for unrealized                                             
gains previously recognized in                                            
net income, net                          14,014              -            
                                                                  ------- ------
Other comprehensive income (loss)       $(48,647)       $23,736             
                                                                  ======= ======

Note 6. Leases                                                                  

The Company amended and expanded its corporate facilities lease as of November  
1, 1995.  The lease is an operating lease, which expires October 31, 2001. The  
Company pays monthly rent plus 31% of all building expenses.  Rental expense    
totaled approximately $114,247 and $119,236 for the years ended December 31,    
1999 and 1998, respectively.                                                    

Future minimum lease payments and the related totals expensed for financial     
reporting under the operating lease consist of the following:                   

                                         Cash        Expense to be
                   Payment        Recognized

Year ending  December 31,                                                       

2000        $ 126,868      $  119,404       
2001          105,723          99,503   
                                       -------         -------
                     $ 232,591      $  218,907
                                       =======         =======

Note 7. Accrued Expenses and Other Liabilities                                  

Accrued expenses and other liabilities at December 31, 1999 consist of the      
following:                                                                      

Accrued sales commissions                                                 
and royalties                $ 39,948                                   
Payroll and payroll-related                                               
liabilities                    83,978                                   
Accrued advertising             58,250                                    
Other                           80,288                                    
                                           -------
                                         $ 262,464
                                           =======

Note 8. Deferred Compensation                                                   

Deferred compensation represents the market value of investments made by the    
Company in conjunction with a deferred compensation arrangement with the        
Company's President for services provided prior to 1991.  Five annual payments  
of $12,800 were paid through December 31, 1995 to a Rabbi trust for the benefit 
of the Company's President.  The Plan permits diversification, and the employee 
has diversified.  A distribution to the beneficiary of $36,850 was made during  
1999.  The amortized cost and unrealized gain on the investments were $44,820   
and $61,014, respectively, at December 31, 1999.                                

Note 9. Line of Credit                                                          

In April 1999, the Company negotiated a lending agreement with Southwest Bank   
of St. Louis that provides a credit facility of $1 million, secured by the      
Company's accounts receivable and inventories, which expires on July 1, 2000.   
This credit facility is expected to meet the Company's needs for the first six  
months of 2000, but additional short-term credit will be sought when fourth     
quarter production requirements become clearer based on early 2000 sales        
successes and projections.  The Bank reserves against this line of credit a     
Standby Letter of Credit in the amount of $400,000 related to the guarantee of  
Talon's line of credit discussed below.  There were no borrowings at December   
31, 1999.                                                                       

The line of credit contains certain covenants requiring a minimum of $6.5       
million net worth, a maximum level of debt at 25% on net worth, and that no     
dividends be declared.  In addition, Ultradata may not acquire other companies, 
increase holdings in existing affiliates, or merge with any entity if any loans 
are outstanding without written concurrence from the Bank.                      

The Company has extended its agreement to be guarantor on a $400,000 line of    
credit issued to Talon GPS, LLC, by a commercial bank in New Zealand.           

Note 10. Notes Receivable Issued for Purchase of Common Stock                   

Notes receivable issued for purchase of common stock represent unsecured        
advances made by the Company to various employees for stock options exercised.  
The notes bear interest at 6% per annum and are due, together with accrued      
interest, on demand on either the termination of employment or the sale of      
underlying stock, whichever comes first.  During 1999, the Company reduced the  
notes receivable and accrued interest by $321,688 in exchange for its           
repurchase of 149,971 shares of common stock.                                   

Note 11. Earnings Per Share                                                     

A reconciliation of the numerator and denominator of the loss per share         
calculations is provided for all periods presented.  The numerator for basic    
and diluted loss per share is net loss for all periods presented.  The          
denominator for basic and diluted loss per share for 1999 and 1998, as          
follows:                                                                        

                                        For the twelve months ended December 31,
                                                               1999 (a) 1998 (b)

Numerator:                                                                      
Net loss                           $(1,997,250)       $(2,330,793)        
Numerator for basic and diluted                                           
loss per share - income available                                       
to common shareholders            $(1,997,250)       $(2,330,793)       
                                                       ==========     ==========
Denominator:                                                                    
Denominator for basic and diluted                                         
earnings per share - weighted                                           
average shares                      3,122,138          3,299,636        

Basic and diluted loss Per Share     $   (0.64)         $   (0.71)        

(a) Options to purchase 412,430 shares of common stock at prices between        
$1.44 and $7.39 per share were outstanding at December 31,1999, but were
not included in the computation of diluted loss per share because the   
options' exercise price was greater than the average market price of    
common shares, with the exception of a few recent options whose dilutive
effect is negligibly small.                                             
(b) Options to purchase 326,192 shares of common stock at prices between        
$3.00 and $7.39 per share were outstanding at December 31,1998, but were
not included in the computation of Diluted loss per share because the   
options' exercise price was greater than the average market price of    
common shares.                                                          

Note 12. Income Taxes                                                           

Income tax expense (benefit) for the years ended December 31, 1999 and 1998     
consist of:                                                                     
                                                                      1999
                          --------------------------------------------
                                           Current         Deferred        Total

Federal                $  (105,913)      $  426,028      $  320,115             
State                            -           50,121          50,121             
                                       -----------------------------------------
                          $  (105,913)      $  476,149      $  370,236
                                       =========================================

                                                                      1998
                          --------------------------------------------
                                          Current          Deferred        Total

Federal                $  (231,227)      $ (466,367)     $ (697,594)            
State                            -          (27,430)        (27,430)            
                                       -----------------------------------------
                           $  (231,227)      $ (493,797)     $ (725,024)
                                       =========================================

Income tax expense for the years ended December 31, 1999 and 1998 differed      
from amounts computed by applying the statutory U. S. federal corporate income  
tax rate of 34% to income before income tax benefit as a result of the          
following:                                                                      
                                                                       1999 1998

Expected income tax (benefit) expense      $(553,185)     $(1,042,139)          
Increase (decrease) in income taxes                                             
resulting from:                                                               
Valuation allowance increase               962,937          648,422         
State income taxes, net of federal                                          
expense (benefit)                          33,080          (80,919)       
Nondeductible expenses for federal                                          
income tax purposes                         2,458            5,993        
Research and experimentation credits             -          (72,353)        
Foreign Operations                           3,642          (45,118)        
Other, net                                 (78,696)        (138,910)        
                                                                -------- -------
Income tax expense (benefit)               $ 370,236      $  (725,024)          
                                                               ======== ========

The tax effects of temporary differences that give rise to significant portions 
of the deferred tax assets and liabilities at December 31, 1999 and 1998        
include the following:                                                          
                                                                       1999 1998

Deferred tax assets:                                                            
Net operating loss carryforward       $ 1,467,945       $  1,216,659  
Research and experimentation credit                                   
carryforward                                   -             72,353 
Note receivable reserved for                                          
financial reporting purposes             170,023            158,243 
Notes and accounts receivable reserves    188,125            109,642  
Inventory reserves, principally due                                   
to accruals for financial reporting                                 
purposes and basis differences           203,812            211,248 
Other                                      35,092             29,285  
                                                          ---------- -----------
Total deferred tax assets             $ 2,064,998       $  1,797,430  

Deferred tax liabilities:                                                       
Prepaid advertising                   $    (9,416)      $   (210,818) 
Property, plant and equipment,                                        
principally due to differences in                                   
depreciation basis                        (1,248)           (18,401)
Unrealized gain on deferred compensation                              
trust investments                        (23,185)                 - 
                                                           ---------- ----------
Total deferred tax liabilities            (33,850)          (229,219) 
                                                           ---------- ----------
Gross deferred tax asset                2,031,148          1,568,211  
Valuation allowance                    (2,031,148)        (1,068,211) 
                                                           ---------- ----------
Net deferred tax asset                $         -       $    500,000  
                                                           ========== ==========

During 1999, the Company received tax refunds for carryback of net operating    
losses of $337,140.                                                             

A valuation allowance has been provided for those net operating loss            
carryforwards and temporary differences in view of the Company's continuing     
losses in 1999.                                                                 

The net operating loss carryforward of approximately $3.9 million will expire   
in 2020.                                                                        

Note 13. Employee Benefit Plans                                                 

(a) Employee Saving and Retirement Plan (Section 401-k plan)                    

 Effective January 1, 1998, the Board of Director's approved a savings and
retirement plan covering all full-time employees. Subject to approval by
the Board of Directors, the Company fully matches employee contributions
up to 3% of total compensation paid to participating employees and one- 
third of one percent is matched for each percentage of participating    
employee contributions between 4% and 6% of total compensation. Expense 
attributable to Company contributions totaled $43,015 and $54,138 during
the years ended December 31, 1999 and 1998, respectively.               

(b) Incentive Stock Option Plans                                                

 At December 31, 1999, the Company has two fixed stock option plans, which
are described below.  The Company applies APB Opinion No. 25 and related
  interpretations in accounting for its plans.  Accordingly, no compensation
cost has been recognized for its fixed stock option plans.  Had         
compensation cost for the Company's two fixed stock option plans been   
determined consistent with SFAS No. 123, the Company's net loss and loss
per share would have been increased to the pro forma amounts indicated  
below:                                                                  

                                                                       1999 1998

Net loss        As reported        $(1,997,250)      $(2,330,793)       
                         Pro forma          $(2,163,741)      $(2,689,415)

Basic and diluted  As reported     $     (0.64)      $     (0.71)       
loss per share   Pro forma       $     (0.69)      $     (0.82)     

Under the 1994 Incentive Stock Option Plan, the Company may grant incentive     
stock options to its employees, officers, directors, and consultants of the     
Company to purchase up to 175,000 shares of common stock.  Under the 1996       
Incentive Stock Option Plan the Company may grant incentive stock options to    
its employees, officers, directors, and consultants of the Company to purchase  
up to 175,000 shares of common stock.  In December 1998, the Board of Directors 
approved an extension of the 1996 Incentive Stock Options plan to provide for   
100,000 additional shares to be made available for future grant.  Under both    
plans, the exercise price of each option equals the market price of the         
Company's stock on the date of grant, and the options' maximum term is five     
years.  Options are granted at various times and are exercisable immediately.   

During 1998, the Company canceled incentive stock options to purchase 236,292   
shares of Common Stock at exercise prices ranging from $5.00 to $7.00.  The     
same number of new options was issued at a price of $4.00.  There were no       
cancellations for the purpose of repricing during 1999.                         

During 1999, the Company cancelled incentive stock options to purchase 17,300   
shares of common stock at exercise prices ranging from $3.00 to $4.00 per       
share.                                                                          

The fair value of each option grant is estimated on the date of grant using the 
Black-Scholes option pricing model with the following weighted average          
assumptions used for grants in 1999 and 1998, respectively: dividend yield of   
zero for all years; expected volatility of 68.0% and 59.1%; risk-free interest  
rates of 6.30% and 5.42%; expected lives of five years for both plans.          

A summary of the status of Company's two fixed stock option plans as of         
December 31, 1999 and 1998, and the changes during the years then ended is      
presented below:                                                                
                                                       1999                 1998

                                                               Weighted Weighted
                                                                 average average
                                                               exercise exercise
Fixed Options                   Shares    price           Shares    price       
------------------------------------------------------------------------------  
Outstanding at beginning                                                        
of year                        326,192   $  4.25         285,792   $  5.85    
Granted (including repriced                                                     
options)                       103,538   $  1.98         276,692   $  3.85    
Forfeit                         (17,300)  $  3.73        (236,292)  $  5.72     
                                                        -------         --------
Outstanding at end of year      412,430   $  3.70         326,192   $  4.25     
                                                =======                  =======

Options exercisable at year end 412,430                   326,192               

Weighted average fair value of                                                  
options granted to employees                                                  
during the year               $   0.65                  $   1.77              

                       Options outstanding and exercisable
Number of shares       Weighted average     
Range of          Outstanding at         remaining          Weighted average    
Exercise prices   December 31, 1999      contractual life   Exercise price      
-----------------------------------------------------------------------------   
$1.00 - $1.99          4,748                4.9 years        $     1.44         
$2.00 - $2.99         98,790                4.9 years        $     2.00         
$3.00 - $3.99         36,200                3.9 years        $     3.00         
$4.00 - $4.99        222,692                3.2 years        $     4.00         
$5.00 - $5.99          5,000                0.6 years        $     5.75         
$6.00 - $6.99         35,000                0.5 years        $     6.39         
$7.00 - $7.39         10,000                1.7 years        $     7.39         
-------               
412,430               

Note 14. Commitments and Contingencies                                          

On September 14, 1989, the Company entered into a royalty agreement relating to 
its ROAD WHIZ product.  After 20,000 ROAD WHIZ units are sold, the agreement    
provides for a 1% royalty payment on net sales of the ROAD WHIZ product and     
0.5% on the Company's other products, which incorporate the ROAD WHIZ           
database.  Royalty payments are made quarterly until September 13, 2009.        
During the years ended December 31, 1999 and 1998, royalty expense totaled      
$39,820 and $53,752, respectively.                                              

On December 29, 1998, the Company entered into a three-year royalty agreement   
with Feldstein and Associates of Finley, Ohio, with regard to the AAA           
TripWizard for 1% of sales to customers other than their own, for which they    
earn their normal independent sales representative commissions.                 

On September 15, 1998, the Company entered into a three-year royalty agreement  
with AAA related to the AAA TripWizard.  The terms are automatically renewable  
for one year and amount to 10% of the wholesale price on sales other than       
through AAA stores and $1.00 per unit on AAA sales.  This agreement recognizes  
the benefit of the AAA logo and data and their promotion of the product through 
their travel stores.  During the year ending December 31, 1999 royalty expenses 
totaled $33,250.  There was no royalty expense in 1998.                         

Note 15. Investments in Affiliated Companies                                    

On March 23, 1998, the Company acquired an 18.9% interest in Talon for          
$282,500.  In August 1998, the Company acquired an option to purchase           
additional shares in Talon for $312,147.  During 1999, the option to purchase   
additional shares was amended, and the above amount was utilized to purchase an 
additional 6.0% interest in Talon.  Legal and consulting costs associated with  
the acquisition and option to purchase additional shares are capitalized as     
part of the cost of the investment, and totaled $124,108 during December 31,    
1999.                                                                           

The Company's 24.9% interest in Talon is accounted for using the equity method  
of accounting and is stated at amortized cost plus equity in undistributed      
earnings since acquisition.  The equity in earnings of Talon is adjusted for    
the annual amortization of the difference between acquisition cost and the      
Company's proportionate share of Talon's net assets.  Amortization is computed  
on a straight-line basis over nine years.  The unamortized difference between   
the investment cost and the Company's proportionate share of Talon is $568,655  
at December 31, 1999.  The Company's share of the earnings for 1999 was         
$61,496 after accounting for the differences between New Zealand GAAP and US    
GAAP.  As discussed above, the earnings were further reduced by amortization    
of $71,081, bringing the equity in loss of affiliate to $9,585.  The Company's  
equity in earnings of affiliate from inception was $118,733 as of December      
31, 1998.                                                                       

In addition to the above transactions, the Company has purchased certain        
electronic components, including parts for TRAVEL*STAR 24( which have been      
sold to Talon at cost.  These sales totaled $3,530 and $477,580 for the years   
ended December 31, 1999 and 1998, respectively.  The Company purchased from     
Talon, at cost, electronic components which are integral to the TRAVEL*STAR 24  
which totaled $15,068 and $638,627 for the years ended December 31, 1999 and    
1998, respectively.  A net balance of $164,550 was receivable by the Company    
at December 31, 1999 and is included in trade accounts receivable.              

In May 1999, the Company formed a joint venture with Influence Content, LLC,    
a website developer, to form Influence Data, LLC.  The Company issued 80,000    
shares of common stock (at quoted market price) from the treasury and options   
(valued at market upon the Black Scholes method) to purchase 160,000 shares of  
common stock for a one-third interest in Influence Data, LLC.  The original     
value of the investment, based upon the consideration given to form the joint   
venture, was $327,200.                                                          

The Company's 33.3% interest in Influence Data, LLC is accounted for using the  
equity method of accounting and is stated at amortized cost plus equity in      
undistributed earnings since acquisition.  The equity in earnings of Influence  
Data, LLC is adjusted for the annual amortization of the difference between     
acquisition cost and the Company's proportionate share of Influence Data,       
LLC's members' equity net assets.  Amortization is computed on a straight-      
line basis over ten years.  The unamortized difference between the investment   
cost and the Company's proportionate share of Influence Data, LLC is $156,053   
at December 31, 1999.  The Company's share of the losses for 1999 totaled       
$60,386.  As discussed above, the losses were increased by $11,147 to bring     
the equity in loss of affiliate to $71,533.                                     

The Company has two investments in affiliates accounted for under the equity    
method.  The affiliates are Talon Research and Development, Ltd. (a New Zealand 
company) (25%) and Influence Data, LLC (33%).  The Company's share of earnings  
of these affiliates is included in income as earned.  Equity (Loss) Earnings    
from Affiliates amounts to $(81,118) and $118,733 in 1999 and 1998,             
respectively.                                                                   

The Company has advanced to Talon $272,683 at December 31, 1999.                

Note 16. Advances to Affiliates                                                 

On July 1, 1998, the Company entered into a joint development and marketing     
agreement with Scientific Communications & Controls, Inc. (Sci-Com), a          
privately-held company based in McLean, Virginia.  The Company transferred all  
software and documentation of the service software acquired from Intellidata    
in exchange for a promissory note bearing interest at prime rate of $400,000.   
In addition, the Company leased computer equipment acquired from Intellidata    
to Sci-Com at favorable rates. The Company advanced Sci-Com $50,000 in a        
promissory note, due June 30, 2000 with interest at 6.36% to expand equipment   
capabilities to support the proposed network. The agreement also includes a     
provision for the Company to advance to Sci-Com up to an additional $400,000    
in additional funds to complete network development, of which $200,000 was      
advanced as of December 31, 1998. These advances were incorporated in a         
promissory note due January 1, 2002, which provides for the Company to be       
entitled to one-half, (50%), of the operating revenue of SmartTime Networks     
(excluding only non-reoccurring engineering services provided by Sci-Com).      
The agreement also provides for the optional conversion of the loan into a      
10% equity interest in Sci-Com, at the Company's sole discretion.  The          
Company has reserved $447,428 at December 31, 1999.  The remaining              
receivables balance is $272,693 at December 31, 1999.                           

Note 17. Significant Fourth Quarter Adjustments                                 

In the fourth quarter of 1999, the Company recorded adjustments that increased  
net loss by approximately $450,000.  These adjustments included $330,000        
related to the investments in Influence Data, LLC, and Talon, $40,000 for an    
increase in the inventory reserve for obsolescence, and $80,000 of other        
various expenses.                                                               

Note 18. Prior Period Adjustment                                                

The Company adopted FAS 115, "Accounting for Certain Investments in Debt and    
Equity Securities" during 1999.  As a result of this adoption, the Company has  
made several balance sheet reclassifications from the deferred compensation     
trust investment account to record the unrealized gain on investments of        
$62,740 as a component of stockholder's equity and restricted cash of $12,290   
as of January 1, 1998.  In addition, an adjustment of $62,740 was recorded to   
reduce previously reported retained earnings.  In order to properly record the  
1998 activity, adjustments for deferred compensation expense of $23,961 and     
investment income of $225 were recorded in the 1998 income statement.           

Note 19. Supplemental Disclosures of Cash Flow Information                      

                 Years ended December 31,     1999              1998

Interest                                       -             $3,790             
Taxes                                          -                  -             

Supplemental non-cash investing and financing activities were as follows:       

Year ended December 31, 1999                                                    
----------------------------                                                    
The Company issued 80,000 shares of treasury stock and options to purchase      
160,000 shares of its common stock, with an aggregate fair value of $327,200,   
for a one-third ownership interest in Influence Data, LLC.                      

The Company redeemed 149,971 shares of common stock in exchange for related     
notes receivable of $321,688.                                                   

The Company exchanged slow-moving inventory for advertising credits from a      
third party valued at $249,685.                                                 

Year ended December 31, 1998                                                    
----------------------------                                                    

The Company sold capitalized software development costs in exchange for a note  
receivable of $400,000.                                                         

SIGNATURES          

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant      
caused this report to be signed on its behalf by the undersigned, thereunto     
duly authorized.                                                                

Ultradata Systems, Incorporated                                                 

By:                                                                             
/s/ Monte Ross                                                            
Monte Ross, President, Chief                                              
Executive Officer and Chairman of the Board                               

In accordance with the Exchange Act, this report has been signed below by the   
following persons, on behalf of the registrant and in the capacities and on     
the dates indicated.                                                            

April 21, 2000                                                          
/s/ Monte Ross                                                          
Monte Ross                                                              
President, Chief Executive Officer                                      
and Chairman of the Board                                             

April 21, 2000                                                          
/s/ Mark L. Peterson                                                    
Mark L. Peterson,                                                       
Vice President of Engineering,                                          
Secretary and Director                                                  

April 21, 2000                                                          
/s/Ernest Clarke                                                        
Ernest Clarke,                                                          
Vice President, Controller and Director                                 

April 21, 2000                                                          
/s/ Steven H. Akre                                                      
Steven H. Akre, Director                                                

April 21, 2000                                                          

Donald Rattner, Director                                                

April 21, 2000                                                          
/s/ John J. Clancy                                                      
John J. Clancy, Director                                                

EXHIBIT 23:                                                                     

Consent of Independent Certified Public Accountants                             

Ultradata Systems, Inc.                                                         
St. Louis, Missouri                                                             

We hereby consent to the incorporation by reference in the Registration         
Statement on Form S-8 (File Number 333-32098) of our report dated               
March 2, 2000 relating to the financial statements of Ultradata Systems,        
Inc. appearing in the Company's Annual Report on Form 10-KSB for the year       
ended December 31, 1999.                                                        

/s/ BDO Seidman, LLP                                                            
BDO Seidman, LLP                                                        
St. Louis, Missouri                                                     
April 21, 2000                                                          

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10KSB’ Filing		Date		Other Filings
		9/13/09
		1/1/02
		10/31/01
		7/1/01
		1/1/01
		12/31/00		10-K/A,  10KSB,  NT 10-K
		10/31/00
		7/1/00
		6/30/00		10QSB,  NT 10-Q
Filed as of:		4/25/00
Filed on:		4/24/00
		4/21/00
		4/12/00
		3/31/00		10QSB,  10QSB/A,  4
		3/28/00
		3/25/00
		3/2/00
For Period End:		12/31/99		NT 10-K
		10/29/99
		9/30/99		10QSB
		6/30/99		10QSB,  4
		6/11/99
		3/31/99		10QSB
		1/1/99
		12/31/98		10KSB,  4,  5,  NT 10-K
		12/29/98
		9/30/98		10QSB,  4
		9/15/98
		8/12/98
		7/1/98
		6/30/98		10-Q
		3/31/98		10QSB
		3/23/98
		1/1/98
		12/31/97		10KSB,  4
		10/13/97
		9/30/97		10QSB,  4
		12/31/95
		11/4/95
		11/1/95
		10/17/95
		11/18/94
		9/28/94
		9/17/94
		9/1/94
		4/21/94
		3/22/94
				List all Filings